The Central Bank of UAE has decided to implement the Direct Debit System (UAEDDS) in the country effective of June 15 to improve the efficiency of the payment systems in the UAE, the bank said in a statement.
"The implementation of direct debit will enable customers to make regular, automatic payments from their banks accounts towards mortgage loans or credit card payments or personal loans instalments,” the bank said.
Commenting on the new regulation, a Central Bank official said that this will eliminate the need to sing several post dated cheques for instalments for obtaining a loan or for financing a car or so and this will also allow the banks to reduce their dependence on post dated cheques.
"This will benefit account holders to plan for their expenses efficiently as the Central Bank will be working with the banking sector, finance and investment firms to devise a campaign to raise public awareness in this regard,” the official said.
The bank statement said that finance and investment firms must be prepared to go live with UAEDDS on the launch date.
Amer Numan Ashour, chief analyst and economist at CNBC Arabia, said that the new system is considered the latest development which promises to transform UAE's payment landscape.
"The UAEDDS will provide a safe and convenient method of making recurring payment transactions for utility services, card payments and loan repayments,” said Ashour.
It is expected that the technologies of Newgen Software Technologies Limited will be implemented as the company has a very strong presence in the Indian sub-continent, the Middle East, Africa and the South East Asian regions.
From Gulf News