UAE banks banned from freezing clients’ accounts

The UAE Central Bank has prohibited local banks from seizing the money of their clients unless borrowers fail to pay three successive loan installments, local daily Gulf News reported on Monday.

The regulator’s decision came in the wake of an official complaint made by an expatriate, who had his account frozen after being dismissed from his job.

The plaintiff, who requested anonymity, told Gulf News that he had taken a personal loan worth Dhs230,000 ($62,620) and was regularly paying installments on time before he was dismissed.

“When I was informed by my employer that they could no longer keep me, I discovered my loan had suddenly decreased to Dhs185,000 ($50,366) . The bank froze my account and used the end-of-service settlement I had received, around Dh72,000 ($19,602), towards my loan,” the expat was quoted by Gulf News as saying.

The Central Bank has urged other customers subjected to freezing of their accounts by banks for unjustifiable reasons to file complaints with it.