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.”For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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