New law for loan defaulters in UAE

New law for loan defaulters in UAE or even credit card defaulters. There are some changes that have been made to the UAE central bank laws in the beginning of 2022. This article is for you if you want to understand the changes and how it affects you as a defaulter. These changes have been made under CPR that is Consumer Protection Regulation which means you are priority. 

Criteria for filing of criminal case for cheque bounce under the new law for loan defaulters in UAE.

Before the changes were made a cheque bounce directly meant a criminal case. Now, after the changes it’s not as simple for the banks. It is imperative to prove that there was a criminal intent to the cheque bounce for example.

• Wrong signature on purpose.
• Asking the bank to stop the cheque before the clearance date.
• Withdrawing the funds prior to the cheque clearance.
• Involved in money laundering or other criminal activities.
• Issuing a cheque for a bank account that is already closed.

As a result of this once its proven that there is criminal intent while issuing the cheque the bank can now initiate a criminal case. For a cheque bounce the banks do not need to approach the police station but can directly go to the court and request them to file a criminal case and travel ban against you. 

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Although it is highly emphasized that a cheque bounce is now decriminalized it could not be further from the truth. The banks can easily prove that there was criminal intent when you issued the cheque. for example cheques are returned because there are no funds in the bank. Criminal intent can be proven simply on this basis that you purposely withdrew the funds before the cheque was deposited. 

Safeguarding UAE bank’s the customer under new law for loan defaulters in UAE

Other amendments made that safeguard your interest so that UAE banking laws and infrastructure appear to be at par with the rest of the world. The amendments listed below need to be followed by the UAE banks. Irrespective of where the customer is the banks need to follow these rules in UAE as well as the home country of the customer. 

• No visits to be conducted. 

The banks and their subsidiaries are not allowed to visit the customer either at their residence or at their office. The banks previously were allowed to visit the customers at their place of work only. Needless to say the banks and their subsidiaries have to adhere laws of both countries.

India specifically.

In india the third parties are not allowed to collect any funds or repatriate any funds outside the country. Which means they cannot conduct any collection activities in india for UAE banks or even GCC banks. There is also a high court ruling that proves this you can check the same by clicking  here. 

• Calling restrictions.

1. The banks and their third party agents have been restricted by the UAE central bank to limit their calling attempts to only 10 per week. 
2. They can call only during the hours of 7 AM to  8 PM. 
3. They are not allowed to call your relatives and friends unless trying to establish contact.
4. They are not allowed to divulge any information regarding the liability to anyone other than yourself.

What can you do if the banks and its collection agents are harassing you?

Unless there is a court paper that says you hae to pay or else your assets will be attached there is nothing that they can do legally. As far as the harassment of calling and visiting is concerned you can simply go to your nearest police station and give the details of the agency and the person calling or visiting you. This will suffice and stop the harassment from these third parties. 

If you need to check your travel ban or immigration ban in the UAE please click below to submit your documents and apply. 

UAE defaulter laws