The UAE Central Bank is set to launch the first phase of UAE Direct Debit System on October 5.
The central bank said yesterday the registration of the banks and finance companies into the ‘Direct Debit System’ has been completed and all banks and finance companies are now ready to use the system.
In a statement, the apex bank said an individual or corporate can set up a direct debit instruction by submitting a signed Direct Debit Authority (DDA) to the service provider. A direct debit instruction can be setup by submitting a signed Direct Debit Authority (DDA) to the service provider. Once a DDA has been successfully setup then the payments are made automatically by the customer’s bank from the account designated by the customer in the DDA upon receiving a request through the UAEDDS from the creditor.
In the near future, the adoption of the ‘Direct Debit System’ will be mandated for all loans and finances being advanced by banks and finance companies. The facility is designed to eliminate the need to sign several post-dated cheques for installments upon obtaining a loan/finance, allowing banks and finance companies to reduce their reliance on post-dated cheques. Monthly installments can be claimed by the lending institutions by using the Direct Debit Request.
