Frequently Asked Question's on UAE Minimum mandated cheque security features & Standard MICR code line
What are these minimum Cheque security features required by UAE Central Bank?
Paper Security features
- Sensitisation
- Ink security Features
- Aqueous fugitive
- Chemical sensitive
- Solvent sensitive
Protection against counterfeiting
- Thermo chromic Ink
- Visible & Invisible Fluorescent
- Photo chromic Ink
Warning Band
Are these minimum Cheque security features applicable to all types of cheques?
Yes, UAE Central Bank minimum security featured is mandatory for all types of cheques including Demand Drafts, Pay Orders & Managers Cheques issued by & drawn on member banks in UAE.
Who is responsible for checking the minimum cheque security features?
It is the collecting banks / payees (customers) sole responsibility to verify the minimum mandatory security features before accepting the cheque/ Demand Draft/ Pay Order/ Managers Cheque.
How can Banks & customers find out whether the cheque meets minimum cheque security feature specifications?
On the front or rear of cheque a warning band mentioning at least one security feature used will be available. This security feature can be checked/ verified without any equipment. Absence of this warning band & features stated could indicate the cheque is fraudulent.
When will these cheque security features be implemented?
All Pay-orders, Managers Cheques issued after 30/11/2009 must be compliant and should have the minimum mandated security features. From 01.01.2010 all customer account cheque leaves printed by banks and issued to customers, or printed by customers themselves, and Demand Drafts/ cheques issued by Banks outside the UAE and drawn on UAE banks must be compliant and should have the minimum mandated security features.
When will the cheque security features be in effect for Pay Orders & Managers Cheques?
The cheque security features will be effective from 01-12-2009 for Pay Orders & Managers Cheques.
What about the Pay Orders & Managers Cheques already collected by customers, which do not comply with Cheque Security features?
Banks will accept Pay Orders & Managers Cheques issued before 01-12-2009 throughout the validity for presentment, which is for a period no more than 6 months from the date of issue unless stated otherwise by the issuing bank on the face of the cheque. (Pay Orders & Managers cheques issued after 30-11-2009 that do not comply with required security features will be rejected by Banks)
When will the cheque security feature be in effect for normal cheques and for Demand Drafts/ cheques issued outside the UAE & drawn on UAE banks?
The cheque security features will be effective from 01-01-2010 for normal cheques and for Demand Drafts/ cheques issued outside the UAE drawn on UAE banks.
What will happen if I am using cheques that do not fully comply with the new cheque security features?
Banks have the right to reject these cheques. (It is incumbent on all customers to replace the cheques without security features with the new security feature cheques before 31/12/2009)
What about the post dated cheques already collected by customers, which do not comply with cheque security features?
Retail & Corporate customers have to deposit all these Post dated Cheques in their banks before 31-12-2009 to be diarized for collection on their respective due dates.
What about the PDC's already collected and held by the bank which do not comply with the cheque security features?
PDC's already collected by the banks till 31.12.2009 have no issues and can be presented in clearing on their respective due dates by indicating "P" to the issuing banks. (i.e. stating that the Bank received the cheque for collection as a PDC prior to 31/12/09)
(From 01.01.2010 banks should not accept any PDC’s without the required cheque security features as security cheques against loans and advances.)
What about the cheques already held with customers, which do not comply with the cheque security features?
Retail and corporate customers may have already collected cheques which do not comply with cheque security features prior to this deadline. In view of this, collecting banks will accept such deposits and process them as usual in ICCS till 31/07/2010. Any PDCs dated beyond 31/07/2010 must be lodged with Banks before 31/12/2009 for collection on the due date.
Till when will banks accept Demand Drafts/cheques issued outside the UAE without the UAE standard MICR code lines & minimum security features?
Banks will accept DD’s/cheques issued outside the UAE without the UAE standard MICR code lines & Security features issued before 01-12-2009, throughout the validity for presentment which is for a period no more than 6 months from the date of issue unless stated otherwise by the issuing bank on the face of the cheque. Demand Drafts/ cheques issued after 30-11-2009 that do not comply with with UAE standard MICR code lines & security features will be rejected by Banks.
What about Security Cheques held by Banks against Loans and Advances?
Security Cheques held with Banks that were collected prior to 31/12/2009 have no issues and can be presented through clearing on their respective due dates by indicating “P” to the Issuing Banks (ie: indicating that this cheque was held as a PDC)
What about unused non security features cheque leaves/ books lying with the customers?
Banks are advised to withdraw unused cheque leaves/ books from their customers by notifying them of these changes and issue replacement cheque leaves/ books if these cheques do not have the minimum mandated security features.
By when do banks need to replace the unused non security feature cheque leaves/ books with security feature cheque leaves/ books for their customers?
Before 31-12-2009 banks need to replace the unused non security feature cheque leaves with security feature cheque leaves for their customers.
Do account to account transfer cheques require these cheque security features?
Yes, all Internal Transfer cheques should also comply with cheque security features
Does magnetic ink still need to be used in the MICR line on cheques?
Yes, magnetic ink must still be used in the MICR line, as automated cheque processing equipment still relies on magnetic ink to read data from the MICR line.
Where can I go for more information on cheque standards?
Your bank is well equipped to provide you with more information on this matter. Please see the attached guidance on the various security features mandated by the Central Bank.