The Central Bank of UAE has announced the introduction of the ‘Direct Debit System' in the UAE with effect from 15th June 2013.
It added that the implementation of Direct Debit will enable customers to make regular, automatic payments from their bank accounts towards mortgage loans or credit card payments or personal loan installments.
"The facility is designed to eliminate the need to sign several post-dated cheques for installments upon obtaining a loan/finance, allowing banks to reduce their reliance on post-dated cheques. The benefit for account holders is that they can plan their expenses more efficiently," the bank said .
Further the Federal Government Strategy requires adopting technology to enhance electronic systems and improve services to banking customers in the UAE. In this regard, Central Bank of the UAE (CBUAE) continually strives to improve the efficiency of the payment systems in the UAE.
"Introduction of the Direct Debit System is yet another strategic initiative from the Central Bank. Given our focus as a regulator we believe it is necessary to have a prudent, stronger and stable economy. Our current intention is to establish a more convenient retail banking system that will create more stable and progressive economic development," it added.
The statement said that "the introduction of the Direct Debit System is a step in the right direction towards increasing the efficiency of our banking system, and elevating it in line with the global best practices, thus strengthening the country's status as a global financial hub."
It noted that the Central Bank will launch the service with all the banks and finance companies across the UAE.