The Saudi Cheque System was issued by Royal Decree No. M/45 dated 12/9/1409 A.H/ A.C.
First: This Royal Decree amends Articles No. 118, 119 and 120 of the Commercial Paper System issued by Royal Decree No. 37 dated 11/10/1383.Follows below the provisions of the amended articles:
Article 118: Taking into account the provisions stated in other Systems, anyone who commits one of the following acts shall be sentenced to up to three (3) years in prison and shall be fined up to 50,000 Saudi Riyals or both:
- Issuing a cheque with insufficient or no coverage.
- After issuing a cheque, disposes of some or all of the coverage in such a manner as to prevent payment of the cheque.
- Ordering non-payment of a cheque.
- Intentionally writing the cheque in such a manner as to prevent payment.
- Issuing or endorsing a cheque with insufficient or no coverage.
- If the payee or the bearer receives a cheque with insufficient or no coverage.
If the convicted person recommits any of the aforementioned crimes within three years from the date of issue of judgment, he/she will be sentenced up to five years and/or fined up to 100,000 Saudi Riyals.
Article 119: Any drawer who intentionally dishonors a cheque even though this cheque was properly drawn, sufficient funds existed in the drawer’s account and the cheque was not contested shall face up to 100,000 Saudi Riyals and the payee shall be compensated for the damage incurred.
These penalties shall be levied against any drawer who intentionally issues a cheque with insufficient funds.
Article 120: Anyone who commits one of the following crimes shall be fined up to 10,000 Saudi Riyals:
- Issuing an undated cheque or a cheque with a false date of issuance.
- Drawing a cheque outside a bank.
- Honoring an undated cheque or accepting such a cheque as compensation.
Second: The following article is added to the Commercial Paper System:
Article 121: The names of individuals convicted in accordance with this system can be published. The court judgment will outline how their names would be published.