Bank chase: 7 new excuses to be bullied?
The UAE Central Bank has given authority to all UAE banks to claim back the full and immediate repayment of any loan under 7 new conditions.
July 19, 2012 9:44 by M. Aldalou
Whoopee, the Central Bank of the UAE has given us, and more importantly, the banks another ray of sunshine to brighten up our days. Under new rules and ‘guidelines’, all banks in the UAE will have the authority to demand a full payment of your loan back as long as it falls under any of the 7 dictated circumstances.
As per a report by Arabic Daily, Emarat Al Youm, the CBUAE has stipulated several clauses where the bank that you owe will have full authority to demand immediate and full payment.
The newspaper says borrowers will be required to furnish a letter from their employers committed them to have their salary and end of service benefits transferred to the bank furnishing the loan for its duration; so you won’t have a legal choice in the matter and whatever the company owes you will immediately be passed on to your bank.
These specific cases are mentioned below:
1) Borrower is terminated for any reason from his/her employment: Great time to ask for immediate full payment?
2) Transfer of the monthly salary of the borrower or any part of it to another party without the written consent of the bank: Fair enough, perhaps the trust is gone!
3) Failure to pay three consecutive installments or six non-consecutive installments: Also could be considered as justified.
4) Invalidity of customer data: Why not ask for a correction first?
5) Borrower leaves country permanently: Let’s hope that doesn’t happen!
6) Death of borrower: No comment.
7) Bank has the right to obtain an insurance policy on the life of the debtor in case of disability and should be paid by the borrower himself.
The three key forms cover personal loans, car financing and overdraft and they are all binding to all the 51 banks and other financing firms operating in the second largest Arab economy.
Loan and Cheque rules in the UAE have without a doubt hit many hindrances along the way, and with a bankruptcy law in draft there may be a need for some strings to be loosened. Although many figures, including Police General Dahi Khalfan may condemn the law that stipulates prison time in the event of bounced cheques, there appears to be a conflict of interest trapped between the pressure to provide human right freedom and the risk of borrowers fleeing the country.
Furthermore, a Central Bank source informed Gulf News that an additional banking law is being put into place which stipulates that UAE banks have the authority to blacklist you if 4 or more issued cheques have been bounced.
“The purpose of this new rule is to reduce court cases due to bounced cheques especially with small sums,” the source pointed out.
To conclude on a mind boggling statistical note, the total number of the presented cheques were 28,499,858 million worth Dh1, 219,003,518,373.00 which is Dh1.2 trillion, UAE Central Bank statistics showed. Statistics of each month in 2012 were also measured showing a rate of 5.5% of those cheques returned.
Committing yourself to personal loans, overdrafts or even cheques is definitely no breezy matter and the consequences could be dire. Consider all other options and strategies before you plunge into the deep end, and now you have 7 extra reasons to reconsider.