Safeguarding against frozen bank accounts in the UAE

Published on: 10/02/18 02:38:pm

When people are denied access to their bank account, even if it is just for a short period of time, it can ultimately have a knock-on effect on their short-term finances including the payment of rent, school fees and savings.

Yet many UK expats living in the UAE are unaware of the various reasons as to why bank accounts can be frozen.

With that in mind, GWM Dubai's Paul Butler highlights the most common reasons why your bank account might be frozen in the UAE and how you can safeguard against this, should the worst happen.

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What is the most common reason for an account to be frozen in the UAE?

It differs case by case, however normally, when a person changes, leaves or loses their job in the UAE, the final salary payment which should include their end-of-service benefits, will also mention that this is the final payment to the bank. The statement will highlight that the person is no longer working for the company which in turn, can automatically send warning signals if debts haven’t been paid. This can include anything from car and personal loans, parking fines or even a large unpaid credit card bill.

With joint bank accounts, what happens if one of the partners passes away?

Another common reason of a bank account being frozen in the UAE, is due to the tragic case of an account holder passing away. The account, which also includes his/her joint accounts, will only be active again through an order from the UAE’s Sharia courts, which could take up to several months. It is crucial that the surviving family are able to provide an up to date, valid will whilst making sure that all debts of the deceased have been cleared. Without a will, it may be an extremely long journey for families in an extremely hard time.

Don't leave your loved ones with a headache at a time when they need it least.

What can UAE bank account holders do to prevent their accounts from being frozen?

Firstly, I cannot stress the importance of residents becoming more are conscious of the various factors as to why bank accounts in the U.A.E can be frozen. Awareness ultimately leads to prevention. Secondly, there is a strong correlation between debt and bank accounts being frozen, which shows the importance of seeking financial advice to eliminate as much debt as possible, especially whilst living in the U.A.E. The bank will continue to freeze the account until they are confident that all debts are able to be paid.

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About Paul Butler:

Having been involved in the banking and financial industry both in the UK, and overseas for 17 years, Paul provides holistic financial planning solutions to enable his expatriate clients to effectively manage their finances and achieve both their medium and long term investment goals.

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