Urgent Emirates: Do banks have the right to reserve the end of service benefit?

The end-of-service gratuity sum may be seized whether it is deposited or not by seizing the debtor's property with others because the law enables seizure of a specific percentage of the salary, making it legal to collect any dues other than the wage.

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The employee's employment ends for one of the following reasons: When they reach the retirement age under the applicable provisions of the Emirate's Civil Retirement Pensions and Benefits Law. In accordance with the rules of the Civil Retirement Pensions and Benefits Law in effect in the Emirate, total disability or medical unfitness for duty.An inadequate end-of-service benefit in terms of value, a request for personal financing from a bank that does not receive the customer's salary, the existence of jobs that do not include an end-of-service benefit and preventing it from the embezzled employee, as well as the possibility that the customer's employer will not comply By transferring the end-of-service benefits to the bank, are some of the most significant reasons for the seizure.

A check, or a collection of checks, signed by the customer as a guarantee of his commitment to the agreed financial payment, was used by these bankers to confirm the banks' right to guarantee their cash.

According to them, unlike expatriate employees for whom some banks withhold the end-of-service reward in full or in part or return it to him with the assurance that his new salary will be sufficient to pay the remaining installments, a citizen employee's transfer from one job to another is accompanied by the addition of periods of service, making it impossible for the bank to reserve it.


According to banking expert Ahmed Youssef, there are a number of situations in which the end-of-service bonus is not regarded as a guarantee for a personal loan, such as when a customer obtains financing from a bank that does not receive the customer's salary. In these situations, it is necessary that banks sign a security check, or a specific number of checks, depending on each bank.

He continued, "One of those cases is the insufficiency of the end-of-service reward in terms of value at times, particularly if the loan amount is significant. There are employees working in entities that do not give an end-of-service reward, such as some bank employees, and if they borrow or obtain financing, There must be a guarantee cheque for their money.
Youssef noted that embezzlement at work permanently denies the employee their end-of-service bonus, and all of these are issues that banks insure against in the event that a client requests bank financing.
Youssef made the point that because a national employee's transfer from one position to another takes into account their prior service history, the bank cannot seize their end-of-service bonus. However, for expatriate employees, some banks seize their entire bonus while others only take a portion of it. Or, if the customer's paycheck from the new job is sufficient to pay off what he owes, based on the loan's outstanding balance, leave it fully up to him.
According to Ali Darwish, a banking expert, the check is solely used as a promise to compel the customer to make the monthly payments in order to escape legal responsibility. The end-of-service incentive cannot be fully depended upon since it may not be adequate or because it assumes that the customer works for a private or semi-public organisation. You are not forced to transmit it, and in this case a second guarantee—represented by the check—is needed to protect the bank's funds.
He continued by saying that banks rarely use security checks unless all other attempts to reach the customer through pleasant means to urge him to settle his debt have failed.
In addition to the guarantee cheque, which the banks view as a tool to fulfil their right in the event that the customer is unable to complete the payment and after the bank has granted it, Darwish explained that banks have the right to reserve the reward in the event that the customer's financing is still valid and he has unpaid installments. It's time to find a new career or set up his bank hedge status.
Noura Kamel, a banking expert, stated in the same context that banks are not satisfied with the end-of-service reward when granting personal financing because there is no assurance that the customer will continue to work, until he pays what he owes until it is paid in full. As a result, she turns to the cheque, noting that some loans are large and the reward according to the salary is insufficient to pay.
She clarified that unlike real estate loans, which include additional guarantees like a mortgage on land or real estate, what banks in the UAE do with regard to guarantees, notably personal loans, is applicable in most countries.
According to Muhannad Awni, a banking expert, the end-of-service compensation is typically insufficient if the customer has many financings, and any failure can happen even while the customer is at work. As a result, banks take a cheque as insurance against future failures.
He continued by saying that personal loans without salary transfers, which typically have high interest rates, are not guaranteed by end-of-service perks either.

7 primary causes.

- Taking out a loan from a bank that does not receive payment from the client.
- An insufficient end-of-service bonus in terms of value.
- In some occupations, there is no end-of-service bonus.
- A person who commits the offence of embezzlement forfeits their end-of-service bonus.
- The business is not required to give its employees their end-of-service benefits.
- The bank is unsure whether the client will keep working.
- Despite the customer's continued work, there is a default as a result of debt accumulation.

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