UAE lawyer urges help for debtors in jail

An estimated 261 debtors are stuck in prison in Abu Dhabi, official figures say

An Emirati legal expert has called for banks to conduct tougher security checks on customers to ensure they can afford to repay loans, it has been reported.

Banks are partly to blame for the large number of borrowers defaulting and ending up doing time in UAE prisons if they have failed to do adequate due diligence, Dr Mohammed Saeed Abdul Al Fattah, a criminal law lecturer at Al Ain University, warned.

“Banks need to examine more the people’s status and financial records before they grant them big loans,” he said.

“Borrowers should provide banks with a guarantee or genuine security for recovering the loan and interest in case they fail to pay back.”

Al Fattah made the comments in the Ministry of Interior’s 999 magazine, according to 7Days, after official figures revealed that 261 inmates are stuck in Abu Dhabi’s central jail because of bouncing cheques and defaulting on bank loans – both of which are criminal offenses under UAE law.

In most cases, the newspaper said, they cannot leave until the debt has been repaid.

However, Saeed Obaid Makhlouf Al Naqbi, head of Al Wathba Punishment and Correctional Facility in Abu Dhabi, said the prison attempts to help jailed debtors to clear outstanding balances.

“We help the inmates in three ways,” he was quoted as saying. “Raising money through our fund, especially for those with small debts; taking names of those with moderate amount to the Sheikh Khalifa Fund, which helps clear debts; and forwarding names of substantial debtors to the amnesty commission introduced by UAE President Sheikh Khalifa bin Zayed Al Nahyan to help them clear unpaid loans.”

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Posted by: karpakarajan

In my younger days, I was taught that bank credit is regulated credit. Borrowing from Bank was a real support. They act like regulators, such as assessing the feasibility and viability of the project for which loan is sought, identifying and validating the source of repayment, and monitoring the conduct of the loan. These days banks lend to a large extent even for consumption purpose. Assessing qualities have diluted except for the introduction of new jargons. So banks are responsible to a large extent for bad loans.

Posted by: Telcoguy

@Fentoni my PA gets bombed with credit offers that are targeted for pure consumption, she never answers so I do not know if they would transform into actual lending.
Further plenty of people in Dubai need to get a credit just to pay the yearly rent (is that consumption?) and the only warranty would be a salary that could stop with 30 days notice as many people have discovered.
Plus during the previous phase there was a huge bubble on mortgage lending (NINJAs anyone?) not just in Dubai but worldwide.
I am afraid I can not share your views on lending.

Posted by: Fentoni

Phew! I've never heard such rubbish. I work at a bank and I have never seen a loan being granted with no purpose listed. I've observed banks here in the UAE and back in the UK are rigorous when it comes to lending and in most cases lending against an asset at no more than 75% LTV when the value of the asset is independently appraised. Unsecured credit cards are the obvious exception to the above.

Posted by: solo

All what the government needa to do is to follow the Law exactly without any misinterpretation.. the law says a prison sentence can be imposed if cheque is given with bad intentions .. the government has to prove bad intention before jailing people and stop assuming that all the cheques bouncing for same reasons.
The law should remain the same but practice should change , so first the complaint should be made through civil court and if the judge find bad intention then he should refer the case to police , but what is happening now is Shylock-style collection , by misusing the law and then say the problem is from the wrong law .
The government should be wiser and stop listening to banks and landlords as they never cared nor will ever care about the society destruction due to their irresponsible behaviours.

Posted by: Telcoguy

Intention is the hardest (almost impossible) thing to prove in a court of law. What you are missing here is that in the UAE you do not need to be found guilty beyond reasonable doubt.
You should always check with a lawyer and do not try to interpret the law yourself
I have said this many, many times but there is a large group of people who seem think that hiring a lawyer is too expensive.
Oh well.

Posted by: Maria

We all done mistake of getting loans and or credit cards, but bank should also consider some cases. We are aware of laws yes, but also at least give alternative options for debtors to finish their obligations, they should at least consider alternative way to finish the debt of the person to avoid jailing people. For example, I have liability of almost a total of 150k because of the credit card penalties, like overlimit and etc. My salary is only 5k monthly inclusive all. I talk to the bank where i am eligible to top-up my loan, to close my other liabilities so that I will pay only in one bank and my case will be lessen. Though I know it is tough for me in case I will pay 4k monthly at least i am save for any threat and avoid to avoid jail, and learn from my lesson. And if my total expenses of 2500 per month for home and sending to money back home, its my problem at least i can avoid jail and other penalties. Hoping this will happen soon.

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