Decline in Bounced Cheques in Oman: What This Means for Business Confidence and Financial Stability
MUSCAT, SEPTEMBER 24 — The incidence of bounced cheques, also known as dishonoured or dud cheques, continues to decline, signaling reduced payment risks, according to the Central Bank of Oman (CBO).
In 2024, a total of 311,764 cheques were returned unpaid, a decrease of 13.89 percent from 362,072 in 2023, the CBO stated in its recently released Financial Stability Report 2025. The proportion of unpaid cheques to total cheques presented for clearing also fell, standing at 8.9 percent of the 3.5 million cheques in 2024, down from 9.8 percent of 3.7 million in the previous year. The report attributes this improvement to enhanced controls and overall stronger financial health.
The CBO noted that the declining trend in unpaid cheques reflects improved payment reliability and greater financial discipline. However, it highlighted a slight increase in technical errors such as stale cheques and early payments, indicating areas needing further enhancements in payment system efficiency.
The total number of cheques presented for clearing also dropped by 6 percent, from 3.7 million in 2023 to 3.5 million in 2024, reflecting a steady shift towards digital transactions.
Insufficient funds remained the primary cause of cheque returns but saw a notable decline of 12.2 percent in 2024, illustrating better account balance management and reduced reliance on cheques.
Significant reductions were also observed in cheques returned for other reasons: ‘refer to drawer’ citations fell by 43.7 percent, ‘payment stopped/payment stopped awaiting confirmation’ cases decreased by 41.9 percent, and returns due to ‘account closed/frozen’ dropped by 29.1 percent. These improvements underline enhanced bank-customer engagement and fewer inactive or abandoned accounts.
The Central Bank credited the decline in unpaid cheques partly to strengthened cheque-clearing frameworks implemented by financial institutions. Increased adoption of digital payments and reinforced compliance practices have further boosted payment efficiency. As customers manage accounts more effectively, the incidence of bounced cheques due to insufficient funds is expected to continue decreasing.
In its third Board of Governors meeting last year, the CBO expressed interest in adopting a ‘partial payment system for cheques.’ This system allows banks to honour cheques for the available amount in the drawer’s account, rather than rejecting the cheque entirely. The Central Bank explained that under this scheme, a cheque would no longer bounce if the full amount is unavailable, as banks would pay out the partial amount unless the cheque bearer opts to reject partial payment.
These developments signal a positive trajectory toward more reliable payment systems and greater financial stability in Oman.
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The steady decline in bounced cheques signals improved financial discipline and payment reliability in Oman, reducing risks for businesses reliant on cheque-based transactions. The shift towards digital payments and enhanced compliance frameworks offers a critical opportunity for entrepreneurs and investors to leverage more efficient, secure payment channels. Smart players should focus on digital financial solutions and monitoring evolving cheque policies like the partial payment system to stay ahead in the market.
