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.



    Aug 8, 2607 11:42


  • Jec Lozano

    Aug 8, 2607 11:42

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

  • Kevin

    Aug 8, 2607 11:42

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

  • Janardhanan

    Aug 8, 2607 11:42

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

  • Balakrishna

    Aug 8, 2607 11:42

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

  • David

    Aug 8, 2607 11:42

    First of all thanks for the person who contacted the bank and thesecond thanks to theBank to give a fair judgement. I also faced thesame problem, even after submitting the new job offer letter and visapage on passport still then blocked my account and later on they openthe account without any money on it. When I asked the bank they saidthats their policy.

  • Harv

    Aug 8, 2607 11:42

    I had the same problem. I quit my job and was looking for a betteropportunity. My wife and kid were in our home country to settle somelegal formalities for our new house back home. I needed to send her somemoney and got to know that my account was frozen. I do have a loan withthe bank which was much lesser than my gratuity. I have never missed asingle payment on my loan before this. It was very dissapointing as mywife was stranded penniless back home. I was was even in a worsesituation 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 showthem my new employment visa. What a shame.

  • Mohammed

    Aug 8, 2607 11:41

    I want to thank the person who brought this issue to the authorities. Iam also facing the same problem with my bank. Itook personal loan last year and was paying my installment on regularbasis. I got a job offer with better pay so i resigned and accepted theoffer. But it was a big shock for me when i came to know that they willnot release my final settlement and salary from my previous companyunless i provide them a guarantor or should wait 3 months to complete myprobation. it became such a worst situation as i was also going to getmarried and i had no money even they didnt release my last salary. inthe end, i went home without money. Now, i came back and have joined newcompany and i provide them salary transfer letter but still they havefrozen my account. They all settled my final settlement with the loanwithout giving me any written notification or letter and i have no ideahow they calculate and settled. Since last 5 months, i have beenstruggling and wasting 4 to 5 hours in the branch to release my salaryafter installment deduction which may take 2 to 3 days. I need to begthem for collecting my own salary. I have some other commitments if ifail to fulfill them on time i might become defaulter. I agree thatBanks have right to take legal actions if there is any delinquency whendue but this is simply an open torture which nobody cares. I am the onlyone know the problem i am going through...May Allah give us patience.. Iwant the authorities to help me....thanks

  • Almunsif

    Aug 8, 2607 11:41

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

  • Vinodkumar

    Aug 8, 2607 11:41

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

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