Dubai expatriates unable to meet liabilities

Up to one quarter of all the cheques written in Dubai may be bouncing as expatriate residents in the Gulf state struggle as the economy slows.

Blank cheques are used to underwrite financial arrangements, such as credit cards, in Dubai, guaranteeing future payments such as a rental agreement or bank loan.

This system arose in the United Arab Emirates (UAE), which includes Dubai, because of the difficulty of doing credit checks on foreign workers. As many of these workers have now lost their jobs in the recession, the number of bounced cheques has risen.