UAE | Crime
Banks warned against giving big unsecured loans
The Chief of Dubai Police has warned five banks they will be named and shamed if they do not stop giving loans without guarantees and through big enticements, as many people have got into trouble for failing to pay off their debts.
- By Alia Al Theeb, Staff Reporter
- Published: 00:00 March 21, 2007
Dubai: The Chief of Dubai Police has warned five banks they will be named and shamed if they do not stop giving loans without guarantees and through big enticements, as many people have got into trouble for failing to pay off their debts.
Lieutenant General Dahi Khalfan Tamim said he will personally adopt a resistance movement against those banks which are also listed on Dubai Police's blacklist. He pointed out that 60 per cent of cases of bounced cheques or inability to pay back debts come from those banks. Their cases amount to 70 per cent of the total cases.
Luxury items
The warning came during an open discussion on the security of bank loans yesterday in which bank representatives, legal experts and economy experts took part.
Dr Mohammad Murad, Director of Dubai Police's Decision Support Centre, pointed out that banks should contribute 50 per cent of the expenditure of inmates jailed for bank-related cases, as the cost of one inmate amounts to the cost of a person staying in a five-star hotel.
He said a field study by the centre on some inmates from Dubai Central Jail revealed that 19 per cent of them were jailed for bounced cheque cases, while around 42 per cent of inmates were jailed for failing to pay back bank loans.
The study also revealed that 55.6 per cent of youngsters in jail were involved in bounced cheque cases, 40.3 per cent of them were university graduates, while 41.6 per cent of them were jailed for failing to pay back personal loans which they took for various reasons such as to get married, buy a car, or to buy shares. More than 60 per cent of them had been jailed for the first time and did not previously have a criminal record.
Dr Murad said personal loans in the UAE amounted to Dh160 billion last year, while loans increased by 63.9 per cent from 2005 to 2006.
The panel called on banks to limit personal loans which are used for luxury item consumption and urged them to give loans for productive endeavours.
The recommendations of the panel also included calling on banks to activate a monitoring mechanism for giving loans or credit cards, setting strict rules while taking a loan and setting a maximum limit for the loan which could be an amount totalling the applicant's salary for two years.
Banks should contribute 50 per cent of the expenditure of inmates jailed for bank-related cases.
How do loans impact people? Are they a good or bad service? Can people live without taking loans?
More from UAE Crime
More from UAE
Community Reports
-
Parents should be more vigilant
Reader's picture highlights risk of negligence by caretakers
-
Warming up to ‘Mobilise the Earth' theme
Dubai school dedicates a whole week to celebrating Earth Day with can-collection drives, sapling plantation and painting competition among others
-
Drivers using mobiles put others' lives at risk
Speeding is dangerous for the driver and other motorists
-
Supporting the needy with food supplies
Group of families engaged in serving isolated labour community hopes to motivate more people to help underprivileged and hungry
Latest news
- Dubai Police to public: Help identify dead man
- Chance of fault on Metro: One per 4 million kms
- Al Ain Zoo launches evening visiting hours
- Emirati students not ready for university
- Recycled gravel to be used for paving roads
- UAE Interact available on smartphones
- Green ambassadors blaze the nature trail
- UAE, UK explore joint cooperation in education
- Dubai Police help foil cocaine smuggling bid
- Carpenter charged with killing friend
- Job scam victim clears name
- Dubai crime, accident rates drop
- Parents should be more vigilant
- ICT forum: What will the future look like?
- Huge rush at ID centres as deadline looms
