Coronavirus: Your outstanding bank loan could lead to travel ban in UAE

Detention or a fine shall be imposed on anyone who gives a cheque without a sufficient and drawable balance.

Question: I am an Indian expatriate living in the UAE. I have been jobless for the last two months. I have outstanding personal loan of Dh25,000 and two credit cards with outstanding debt of Dh35,000. I have registered my details on Consul General of India-Dubai website to travel back to India after the restrictions on flights, due to Covid-19, are removed. Will my aforementioned financial liabilities in the UAE make it difficult for me to get repatriated to India?

Answer
It should be noted that any bank or approved financial institution in the UAE has to follow the guidelines laid down by Central Bank of UAE while lending personal loans or providing credit card facilities to the individuals.
Article 12 of Regulation No. 29 of 2011 related to regulations regarding bank loans and services offered to individual customers, states the conditions for opening of accounts, providing of credit cards and granting loans and bank facilities. It states:
"a) Conditions for opening of accounts of all types as well as conditions for obtaining credit cards must be included in a standard agreement, drafted in both English and Arabic and written in an easily readable font, and in accordance with texts drafted and approved by the Emirates Banks Association.
b) Conditions for granting personal loans, car loans, overdraft facilities and facilities for covering unpaid credit card balances must be included in standard applications, drafted in both Arabic and English and written in an easily readable font, and in accordance with texts drafted and approved by the Emirates Bank Association."
Further, the Central Bank of the UAE through its notice No. 3692/2012 to all banks and finance companies in the UAE has provided a format of general terms and conditions to be incorporated in agreements for personal loans, overdrafts and auto loans which has been approved by the Emirates Banks Association. The said formats are in accordance with Article 12 (a) and (b) of the Regulation No. 29 of 2011 related to regulations regarding bank loans and services offered to individual customers.
Article 4(4) of the Personal Loan Agreement format approved by the Central Bank of UAE states that: "The loan elapses and all the installments, interests and any other fees and expenses become due and payable immediately without having to give any notification or any court ruling and without prejudice to any other rights of the bank according to this agreement or in accordance with the law in the event of occurrence that the borrower failed to pay three consecutive installments or six nonconsecutive installments of the monthly installments without approval of the bank."
Based on the aforementioned provisions of law, you may have signed a Personal Loan Agreement or you may have signed accepting the terms and conditions in the application form while availing personal loan and credit card facilities with the lending bank or the financial institution. You could be held responsible if you have defaulted in repayment of personal loan or credit card outstanding continuously for three installments or six non-consecutive installments to the lending bank or the financial institution.
Further, the lending bank or the financial institution, which granted personal loan and credit card facilities to you, may have collected from you security cheque/s as guarantee for the personal loan and credit card facilities provided to you. In the event of default on repayment of personal loan and credit card facilities by you, as mentioned above, the lending bank or financial institution may deposit your security cheque/s for collection and if the said security cheque/s are dishonoured by your bank due to insufficient funds in your bank account, the lending bank or financial institution may file a criminal complaint against you for dishonour of security cheque/s. 
It should be noted that dishonour of cheque in the UAE is considered a criminal offence. This is in accordance with Article 401 of Federal Law No. 3 of 1987 on issuance of Penal Code of UAE states:
"Detention or a fine shall be imposed on anyone who, in bad faith, gives a draft (cheque) without a sufficient and drawable balance or who, after giving a cheque, withdraws all or part of the balance, making the balance insufficient for settlement of the cheque, or if he orders a drawee not to cash a cheque or makes or signs the cheque in a manner that prevents it from being cashed."
Based on the aforementioned provision of law, upon completion of process of filing criminal complaint against you by the lending bank or the financial institution, there may be a travel ban imposed on you and in that event you may not be allowed to travel outside the UAE.
However, if the security cheque/s amount is lesser than Dh200,000 and if your lending bank or the financial institution is based in the emirate of Dubai, pursuant to Law No. 1 of 2017 called 'Criminal Order Law' the punishment may be a financial penalty which may vary between Dh2,000 and Dh10,000 depending on the cheque/s amount. Upon payment of this financial penalty, a travel ban imposed due to dishonour of cheque/s may be lifted against you and you may travel to your home country.
However, the lending bank or financial institution may file a civil case against you in the UAE to recover the outstanding personal loan and credit card amount and may again obtain a travel ban against you. It is recommended that you consult a legal practitioner in the UAE to avail further professional advice.

Know the law
Detention or a fine shall be imposed on anyone who, in bad faith, gives a draft (cheque) without a sufficient and drawable balance or who, after giving a cheque, withdraws all or part of the balance, making the balance insufficient for settlement of the cheque

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.