The Central Bank has expressed frustration at a five-month delay in upgrading the UAE's network of automated teller machines to accept deposits of new Dh500 notes.
New banknotes hard to counterfeit and deposit
The Central Bank has expressed frustration at a five-month delay in upgrading the UAE's network of automated teller machines (ATMs) to accept deposits of new Dh500 notes.
But a fix is on the way within "a matter of days", said the head of one of the UAE's biggest ATM vendors.
The notes, which contain a transparent window as a fraud prevention device, have been incompatible with the UAE's network of automated teller machines since their introduction last November.
Although bank customers can deposit the Dh500 notes via bank tellers, the need for upgrades has led to a costly refit and downtime for affected ATMs.
The banknotes were upgraded with new security features to make them more difficult to counterfeit, as part of efforts to ensure the security of the UAE banking system.
The Central Bank was becoming increasingly irritated with the slow process in upgrading the ATMs to allow deposits of the new notes and had issued a circular urging vendors and banks to hurry up, said Rashid Al Fandi, the executive director of banking operations and payment systems.
"When we launched the new, amended Dh500 (US$136.12) notes we informed all the banks to reprogram their machines," he said. "It seems there was a delay in reprogramming the deposit-taking machines. This was what we asked the banks - so why the delay?"
The Central Bank's annoyance was compounded by the fact that other devices that took the Dh500 notes, such as counting machines, were reprogrammed within three days.
But upgrading ATMs to take the new notes was more complex than the Central Bank had bargained for, said Sherif El Shafie, the regional managing director at NCR Corporation, a US maker of ATMs, barcode scanners and self-service kiosks and one of the biggest vendors of ATMs in the UAE.
"There is a sophisticated process for certifying any new banknote release to ensure that the technology identifies and recognises genuine notes," he said. "This process takes some time to ensure accuracy."
The hardware upgrade had been made and was now in a rollout phase. There is "absolutely no issue to dispense the new Dh500 note on ATMs," he added.
Bankers said the fault had affected all ATM machines that accept cash and cheque deposits, with both banks and vendors having to bear the costs of the upgrade.
"All the banks are at this disadvantage," said Tom Smith, head of retail banking at United Arab Bank. "Ultimately, the intention was very admirable and the right thing to do," he added, but said the execution of the move had caused problems.
The Central Bank plans to upgrade other denominations of banknotes in due course, Mr Al Fandi said.