The UAE Is Notorious for Freezing Bank Accounts. This Is Why.

Published October 1st, 2018 - 07:32 GMT
Visa change or expiries are the two most common reasons. (Suttersrock)
Visa change or expiries are the two most common reasons. (Suttersrock)

Though there are a number of reasons why UAE residents' bank accounts could be frozen, such as arrest after a serious car accident or financial loss to employers, visa change or expiries are the two most common, says a new report.

Hamzah Shalchi, regional director of Guardian Wealth Management in the Middle East, said most residents are not even aware of the reasons why their bank accounts can be frozen.

"Most people don't know that in the UAE when a person changes, leaves or loses their job, the final salary payment, which should include their end-of-service benefits, will also mention that this is the final payment to the bank," said Hamzah Shalchi, regional director of Guardian Wealth Management in the Middle East.

He pointed out that when the final statement by the employer is sent to the bank, it automatically sends alerts whether debts haven't been paid by the customer or not. "This can include anything from car and personal loans, parking fines or even a large unpaid credit card bill."

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Ambareen Musa, founder and CEO of Souqalmal.com, advised residents to inform banks in advance when switching jobs in order to avoid any hassle later because a bank is not aware of your circumstances, whether you're switching jobs and staying back in the country or leaving altogether.

"When final settlement hits your bank account, the bank doesn't know whether you lost the job and leaving the country or switching job and going to get a new visa. People need to check with the bank and let it know earlier on and ask about the procedure as you just resigned," she said.

In addition, according to Shalchi, if a person is arrested, involved in a car accident and taken to prison for causing injuries or has even been charged with financial costs towards their employer, there is a huge risk that their bank account is frozen until all issues or charges have either been dropped or resolved.

Globally, according to Guardian Wealth Management, bank accounts are mostly frozen due to suspicious transactions or in case of an illegitimate business activity.

Many times, Shalchi said, residents don't face such problems with switching jobs but many have had their total financial lives put on hold. "There is a strong correlation between debt and bank accounts being frozen. the bank will continue to freeze the account until they are confident that all debts are able to be paid."


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