UAE bank offers free one-way flights with new loans

Citibank’s UAE subsidiary has launched a marketing campaign offering residents a free one-way flight out of the country if they sign on for a personal bank loan.

The scheme, which offers loans of up to AED120,000 against a minimum monthly salary of AED5,0000, offers a one-way flight for customers taking a loan of up to AED64,000.

Those that take AED64,000 or more are gifted a return flight, the lender said in advertisements.

Citibank has paired up with low-cost carrier Air Arabia for the programme, and offers flights to 34 destinations including the Indian subcontinent and Europe.

The loan plan may be seen as unusual following the number of expatriate workers that left the UAE in the wake of the financial crisis, in a bid to avoid loan defaults.  

Under UAE law, bouncing a cheque is a criminal offence that can result in a jail sentence. Blank cheques are commonly used to underwrite financial deals, such as credit cards or bank loans, to guarantee future payments.

At the height of the financial crisis in 2008, it was estimated 2,500 people a month were absconding from Dubai alone to escape unpaid loan bills.

Dubai-based lender Gulf Finance in February launched a loan programme aimed at small businesses that promised not to report clients to the police if they defaulted on their debts.

The scheme hopes to attract would-be small business owners nervous about seeking loans from larger banks known for notifying authorities when clients default on loans or bounce cheques.

“Our position is that if you’re courageous and want to start your own business, it shouldn’t be a criminal offense,” chief executive office Steve Williams told Arabian Business.