Expats in UAE run risks of sudden bank account freezes

Published:  15 Nov at 6 PM
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Tagged: Visas, UAE
For UAE expats, it’s the worst scenario to find your local bank account is frozen!

Inability to access funds, even for a short time, is the worst nightmare for many expats, especially when they’ve not the faintest idea why it’s happened. It’s tricky enough to bank in a country where you can’t speak the local language fluently, and even worse when even the alphabet is indecipherable. Losing access to necessary funds can cause knock-on effects such as non-payment or education charges, rent and even shopping for necessities including food!

The most usual reason for a bank’s blocking of a client’s account is that a recent transaction seems suspicious, especially if it might involve an illegal business transaction. However, financial professionals in the UAE believe the most common r4easons are simply changes to customers’ visas or their expiry. Most expats have no idea that, when a job is lost or changed, the final salary payment notice which includes end-of-service perks also states the amount is the final payment to the account, thus alerting the bank to the fact that certain debts might not be paid as the account holder no longer has his original job.

According to the experts, UAE banks make a strong correlation between frozen bank accounts and debts, even when it’s known that expats have offshore or home country accounts containing funds. Once an account is frozen, the bank is reluctant to open it again until all service bills and other commitments have been paid. There are banks in the UAE who’re more sympathetic to their customers’ needs, but those banking with others have frequently had to put their financial lives on hold until a solution is found.

Perhaps the worst time to find out an account has been frozen is when the account holder has died. Freezing the accounts of deceased expats, even when they’re held joint with spouses, does happen, and needs to be prepared for. Should pre-arrangements not have been made, the account will not be opened until all debts are cleared and an order is sent from the UAE’s Sharia court. This can take several months, leaving families of the deceased in a financial no-man’s land.
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