Loan closure penalty
I had taken a loan almost two years ago from Emirates NBD. Now, I have changed jobs and the new company will not take an undertaking to inform the bank when I leave/resign from the current company. I am not sure why they should be informing them in the first place, and what would happen to the company if they forget to inform the bank.
I had called the collections department to inform about the move to a new job, and asked them the procedure to get the end of service benefits released.
They just mentioned that I would have to provide a salary certificate from the new employer and the new visa copy. I was specific in asking them if they had any particular format, and they said that they required a standard letter, stating my salary and benefits. I visited their BurJuman branch to submit the documents, which took some effort to get from my employers.
I was then told that the letter has to be in a format recommended by the bank. I made another three trips to the bank, before they accepted all the documents. I asked them for the location of any debt collection team, and they just gave me a number told me to refer to the serial number.
So, I called them and when I enquired about the document and the status of my account, I was told that they would need a letter from my employer, agreeing to inform the bank if I leave/resign. If I settle my loan by adjusting the end of service benefit, I would have to pay penalty for pre-closure.
Points to be noted:
1. I am not the one calling up the bank every day asking for loans. I get calls every other week offering loans, credit cards, credit card loans, instalment plans and so on.
2. When the customer does go to the bank’s relationship manager, they do not explain the terms and conditions (because they could scare away the client and lose their bonus). They just make you sign on the dotted line and say ‘we will help you fill up the rest of the information’.
3. Why should the company be made to give an undertaking to inform the bank, when a person receives a loan?
4. Why should the customer pay a penalty when it is the bank that wants the customer to pay for the outstanding loan?
I had taken loans previously from another bank, and they allowed me to change jobs, based on a verbal undertaking that I would make sure that there is enough balance in the account for loan recovery every month. This was honoured and cleared.
The only reason I am pursuing this is because the bank wants to charge me early closure penalty, when I am ready to continue paying instalments, and I have also given an undertaking that I will inform the bank in case I change my job or resign. If the bank wants to close the loan, they should do the same, after deducting the interest amount for the balance period and without penalty.
I would appreciate if Gulf News can intervene and get this issue sorted out so that more people are not affected.
From Mr Arvind Ramachandran
The management of Emirates NBD responds:
We are pleased to inform you that our Group Customer Experience team has been in touch with Mr Ramachandran and resolved the matter to his satisfaction.
Also, we wish to clarify that as per the Bank’s procedures, his End of Service Benefits (EOSB) were placed on hold since he has a personal and auto loan with the Bank. Mr Ramachandran’s new company was unable to provide the Salary Transfer Letter in the required format; hence the EOSB were not released. As a service gesture for customer’s relationship with Emirates NBD and on an exceptional basis, the Bank has arranged to release the EOSB in order for Mr Ramachandran to continue his monthly payments.
Furthermore, Emirates NBD appreciates its customers’ feedback and will take every opportunity to further review and enhance any internal processes that require attention.
We would like to reiterate our commitment to providing superior service to our customers and thank you for your continuous support in providing us with the opportunity to resolve their issues.
Mr Ramachandran responds:
Thank you for the support received from Gulf News and Emirates NBD. The case is resolved.
(Process initiation: May 25. Response from organisation: June 6. Reader confirmation: June 8.)
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