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01 October 2023

Why your UAE bank may still be fining you even after loan settlement

By Parag Deulgaonkar

Have you closed your bank account in the UAE after paying your loan?

If not, do it, or else you may be fined for not maintaining the minimum balance.

“I took a loan from a local Islamic bank and repaid it on time following which I went to the bank to close my account,” says MD, who asked her initials to be used.

She added: “The bank official told me that there was no need for me to fill any form for account closure since the account was opened for the settlement of the loan and as the loan had been cleared the account would be close automatically. But, I insisted on an account closure form.”

To MD’s surprise, she got fine of Dh25 for not maintaining the minimum balance in her savings account.

“I visited the bank again. Another official told me that as I had filled the form my account would be closed, but next month I again got a fine for not maintaining the minimum balance.

“I revisited the bank and was then asked to fill an account closure form again, following which the official assured me that my account would be closed.
Later, I confirmed with the bank’s call centre since I wasn’t given any account closure letter.”

MD said: “My genuine concern was that if I had left the country for good, the account would have remained active and the fines would have accumulated for years.”

A banker told Emirates 24|7: “There is a possibility that a savings account is linked to a loan account and the former may never close even if you have paid the loan.

“Hence, it’s advisable that the customer give a written a request to close the savings account or fill the account closure form. Only a written document can be a proof and not an oral statement.”

He revealed that banks do write off the outstanding amount from a customer, but will send all the information to UAE Central Bank, who may put the customer on defaulter list.

[Image via Shutterstock]