Ci-Net’s system to inquire about bounced cheques

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KUWAIT CITY, May 4: The Credit Information Network Company “Ci-Net” has finally completed the preparation of a system for inquiring about bounced cheques, which increases the ability of banks to mitigate customers’ risks arising from this window, reports Al-Rai daily.

In this regard, relevant sources explained that the company has recently expressed its readiness to launch the bounced cheques system for banks, through which it will provide a list of its subscribers that includes data of clients who have three bounced cheques.

According to the instructions of the Central Bank of Kuwait regarding the central inventory system for clients whose accounts were closed in local banks due to bounced cheques based on lack of balance, Ci-Net finished preparing a new window to inquire about bank customers, this time not related to providing a database of defaulting borrowers, but the data of bounced cheque holders for customers inquired about in the commercial credit facilities portfolio.

The new inquiry system will be launched for actual application after the completion of its regulatory approval procedures from the Central Bank of Kuwait. Its information provided on the company’s inquiry system will include the data of every customer who was returned to the issuer cheques during the year due to lack of balance with a maximum of three cheques, or whoever the bank sees to have bad faith, which will result in not cashing the cheque.

It is expected that the client’s name will continue to be included in the blacklist on the “Ci-Net” query system for a period of one year, after which his name will be removed from the list.

During the listing period, no bank may open new cheque accounts or issue new cheque books for clients on the list, with the knowledge of any of the banks. Banks must ask clients whose accounts have been closed for this reason to handover the unused cheques to the bank.

Each bank is also required to supervise the closure of the account of any customer included in the list with the knowledge of other banks, in the event that one cheque drawn on his account with the bank is returned due to lack of funds.

Banks are also obligated to provide the “Ci-Net” system, through the direct communication line with the system, with the data of customers whose accounts are closed due to bounced cheques on the day of closing the account itself.

The sources indicated that banks should start taking the necessary measures to prepare the database required to provide the bounced cheque list system on the Ci-Net website, as part of the policy of dealing with bounced cheque clients whose accounts in local banks were closed due to dud cheques.

The went on to explain that the launch of the database of bounced cheques for inquiries comes within the control moves that enhance the safety of using bank cheques, and reduce the increase in dud cheques, which establishes confidence in the cheques as a tool for fulfillment and leads to avoiding the negative effects of misuse of cheques on transactions.

This also comes within the framework of enhancing financial inclusion in the financial system, and contributes to the development of the information system currently used among local banks, in addition to achieving an appropriate level of unification and information organization between banks in the field of counting customers whose accounts were closed in local banks due to dud cheques.

As a result, this system guarantees the sustainability of financing areas and indicators for measuring the risk of default, which is reflected in the credit indicators of Kuwait with the credit and financial institutions of international banks, and enhances their financial inclusion.

It is worth highlighting that, according to statistics by the Central Bank of Kuwait, the total number of cheques presented in Kuwait during 2022 amounted to about 4.18 million cheques from about 148.8 thousand customers, with a value of approximately KD 26.93 billion. This is down by 0.5 percent from what it was in 2021 when it reached KD 4.2 billion.

The number of cheques returned during 2022 due to lack of balance amounted to about 3,962 cheques, with a total of KD 59.8 million, issued by about 2,587 customers. This has reduced in value by about 47.1 million, or 44 percent, compared to about KD 106.9 million in 2021.

The statistics showed an increase in the value of cheques that caused accounts to be closed during 2022, by about 64.8 percent, reaching KD 30 million, compared to 18.2 million in 2021. The number of those cheques last year amounted to 1.89 thousand, and the number of accounts closed because of them reached 608 accounts.

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