Banks in UAE can't seize client accounts

Central bank clarification follows complaints about lenders abruptly freezing accounts

The UAE Central Bank building in Abu Dhabi
Image Credit: Ahmed Kutty/Gulf News
The UAE Central Bank building in Abu Dhabi.
11 Gulf News

Abu Dhabi: The UAE Central Bank has held that banks operating in the UAE have no right to seize the money of their clients unless they had defaulted on payment of three successive loan instalments. The regulator urged those subjected to freezing of their funds by banks for unjustifiable reasons to file complaints with it.

The statement came in reaction to a complaint by an expatriate who was dismissed from his job at a local department and found that his account had been frozen by his bank. Requesting anonymity, the aggrieved person called on the Central Bank to look into the measures initiated by the bank and to revise them for the general benefit of depositors.

S.S. said he was allowed by his employer to look for another job and given the assurance that his visa would be valid until he had found another job. He said his bank dashed all his hopes when it emptied his funds and imposed a freeze on his account.

“I had taken a personal loan from the bank worth Dh 230,000. I was regularly paying all instalments in time and never delayed the payment of any of the instalments. When I was informed by my employer that they could no longer keep me, I discovered my loan had suddenly decreased to Dh185,000. The bank froze my account and used the end-of-service settlement I had received, around Dh72,000, towards my loan,” S.S. complained.

“I had good credit record and was never late in paying. So I tried to reach a deal with the bank asking them to take only half and give me the chance to pay my rent and survive until I had found another job. The bank lifted the freeze on my account but it was empty since they insisted on taking the entire amount towards my loan,” he added.

S.S. was not the only one to land in the hopeless situation. Another resident I.S. shared his similar experience with Gulf News.

“It was Eid, so I went the night before to an ATM machine to withdraw money for Eid clothes and presents for my children. Instead, I got a written message asking me to contact the bank. I had no money and no Eid presents for my family until the bank reopened after Eid holiday,” I.S. recalled.

“The bank staff told me that they froze my account when they received my end-of-service benefits and the notification that I no longer work nor have a monthly salary. The employee said that this is a standard procedure since I had a car loan. I was really mad as I had paid most of the loan and the remaining amount was only about Dh22,000 while the gratuity was over Dh120,000. There was no need for such a drastic measure before Eid. There was not even a notification that the bank had acted that way; at least, they should’ve informed me,” she said.

I.S. called for the UAE Central Bank to look into ways to safeguard the interests of both parties and evolve a clear formula that would give bank clients every chance to meet their financial commitments as they dealt with events beyond their control.



    08-Aug-2607 23:42


  • Jec Lozano

    08-Aug-2607 23:42

    It's normally mention in the Bank letter format for Salary Transfer that any end of service benefits will be transferred to the account of the employees but it's not however mentioned that Bank has the right to freeze...I've experienced the same thing but I personally talked to the head of the collection. Told them that in good faith am informing them that i am changing my job and no intention at all to runaway or anything and am paying on timely manner. Thank God , it did not take so long and they unfreeze the account.

  • Kevin

    08-Aug-2607 23:42

    I have had the same problem. Which bank is this? Can anything be done now to get my money back? Any help and advice is appreciated.

  • Janardhanan

    08-Aug-2607 23:42

    I am just a day late to know this. The bank where i have been getting my salary through had froze my account on receipt of my end of benefit. I informed the bank in prior and also gave all the relavant documents for my new job. The salary for my new job also was credited. But the bank took three additional EMIs in July terming "To reduce their risk" and still did not release my account for me to withdraw cash. They dont work like an institution. There is no genunity in their approach.

  • Balakrishna

    08-Aug-2607 23:42

    Thanks to gulf news for conveying this message as i had taken a loan from the bank ,but now i am planning for a change of job ,so the subject has thrown away my worries

  • David

    08-Aug-2607 23:42

    First of all thanks for the person who contacted the bank and the second thanks to theBank to give a fair judgement. I also faced the same problem, even after submitting the new job offer letter and visa page on passport still then blocked my account and later on they open the account without any money on it. When I asked the bank they said thats their policy.

  • Harv

    08-Aug-2607 23:42

    I had the same problem. I quit my job and was looking for a better opportunity. My wife and kid were in our home country to settle some legal formalities for our new house back home. I needed to send her some money and got to know that my account was frozen. I do have a loan with the bank which was much lesser than my gratuity. I have never missed a single payment on my loan before this. It was very dissapointing as my wife was stranded penniless back home. I was was even in a worse situation here, jobless, no money to pay the rent and my other bills. The bank told me they could only activate my account if I would show them my new employment visa. What a shame.

  • Mohammed

    08-Aug-2607 23:41

    I want to thank the person who brought this issue to the authorities. I am also facing the same problem with my bank. I took personal loan last year and was paying my installment on regular basis. I got a job offer with better pay so i resigned and accepted the offer. But it was a big shock for me when i came to know that they will not release my final settlement and salary from my previous company unless i provide them a guarantor or should wait 3 months to complete my probation. it became such a worst situation as i was also going to get married and i had no money even they didnt release my last salary. in the end, i went home without money. Now, i came back and have joined new company and i provide them salary transfer letter but still they have frozen my account. They all settled my final settlement with the loan without giving me any written notification or letter and i have no idea how they calculate and settled. Since last 5 months, i have been struggling and wasting 4 to 5 hours in the branch to release my salary after installment deduction which may take 2 to 3 days. I need to beg them for collecting my own salary. I have some other commitments if i fail to fulfill them on time i might become defaulter. I agree that Banks have right to take legal actions if there is any delinquency when due but this is simply an open torture which nobody cares. I am the only one know the problem i am going through...May Allah give us patience.. I want the authorities to help me....thanks

  • Almunsif

    08-Aug-2607 23:41

    Bank should not froze any money; infect when every we take personal loan there is insurance covered In case 1 % or 2% of people he or she becomes defaulter bank can get it from insurance.

  • Vinodkumar

    08-Aug-2607 23:41

    I also got some what similarexperience with national bank of abudhabi. bank issued credit card for me when my salary transfer to bank account. Later i changed my job. company request to change my account to other bank. so i do made account on other bank started salary transfer on that bank. but my cheque transaction doing trough NBAD. after one and half years when the due date of my rent cheque i deposit money early morning. after noon i got a call from my branch your account is freeze as your salary is not coming to this account we need a security cheque for credit card. in 18 months they never ask me to submit cheque. never made a due for credit card. the second day i paid the balance on the card and ask them to cancel the credit card. but after cancelling the credit card. they keep more than 45 days the same freeze condition. then i called the call center and told i going to file case against bank then only they released

  • Load more

Latest Comment



30 May 2016 15:03 jump to comments

Also In Complaints

Job loss insurance claim