UAE banks threaten customers over debts

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UAE banks threaten customers over debts
Jul 26, 2009

UAE bank provisions soar to $2.62 bln

Banks in the UAE are arm-twisting their customers to recover debt, with people even getting threats of being sent to jail if they do not pay their dues, local daily the National reported on Sunday.

Customers spoke of being approached by aggressive bank staff to pay their dues, with one woman saying she was hounded by debt collectors for an outstanding credit card amount of just 16 dirhams ($4.30).

During the boom years UAE banks had aggressively offered loans and credit cards to customers, but the current economic downturn has exposed them to bad debts as rising job losses see thousands leave the Gulf state and their debts behind.

Growing concerns over debts has led to local banks resorting to heavy-handed tactics to get their money back, the National said.

Junaid Malik, an Emirates NBD customers told the newspaper, bank staff threatened to cancel his account immediately and cash his security cheque if he did not meet a payment that was due.

Banks require people to give them undated cheques as security guarantee when they apply for credit cards.

The UAE does not have insolvency laws and a bounced cheque can land a person in prison.

“If every person had to deal with a bank employee who threatens each of his customers who don’t pay their debt with a jail term or an arrest warrant, I can understand why so many people are leaving the country and fleeing back to their home countries,” Malik was quoted as saying.