Bank customers in the UAE are calling for a halt to monthly loan deductions before their due date, pointing out that banks reserve funds in their accounts before the monthly loan installment is due, sometimes even days before their salary is deposited. This exposes them to financial distress or prevents them from meeting other obligations, such as rental checks or expenses related to their children's education.
They told "Al Ittihad" that sometimes there is a school check or rental installment due after the 20th of the month, before the scheduled installment date, which makes the customer ensure the amount is available in the account for this specific commitment. However, the bank seizes it for the monthly installment, confirming that this causes what they described as "great confusion," leads to check bouncing or delayed payment, and imposes fees and other issues that could be avoided if the bank adhered to the set payment date.
They explained that the agreed-upon date for the monthly installment is usually the day the salary is deposited into the account, but what happens is that any deposits into the bank account are seized by the bank two or three days, and sometimes five days, before the due installment date.
They mentioned that when they tried to object by contacting customer service centers, they were informed to file a complaint and wait, noting that the last days of each month are usually when the available balance in the account is for basic needs. They considered it inappropriate for the bank to seize those amounts, even if the salary is delayed by several hours or a full day, confirming that it is better to deduct the amount directly when the salary is deposited and not before.
Commenting on this, banking expert Amjad Nasr said, "A bank seizing any balances in the account two or three days before the installment due date may be legal or illegal, depending on the contractual wording and the nature of the account."
He explained, "If there is a direct debit authorization, the deduction should be on the due date itself. In this case, the bank's deduction without an explicit clause in the contract is a wrongful practice. However, if the contract includes a (right of set-off) clause, this clause gives the bank the right to seize any credit balance to cover due or imminent obligations. But the problem here is that some banks interpret the term 'imminent' broadly (two or three days), which is a point of contention."
Nasr continued, "From a consumer protection perspective, deducting before the due date disrupts the customer's cash flow management and can lead to other checks bouncing, which conflicts with the principle of fair dealing with the customer." He confirmed, "Deducting before the due date is clearly rejected if there was no prior delay from the customer, the bank did not notify them in advance, and there is no explicit contractual clause for early deduction. Here, the customer has the right to object officially."
He added, "If this is proven, the customer can file a complaint with the bank first, and if it is not resolved, they can turn to the (Sunduk) unit," referring to the Banking and Insurance Disputes Settlement Unit.
For his part, banking expert Mohammad Gazi said, "Banks do not deduct installments twice, but what sometimes happens is that the customer's salary is deposited early, and here the bank seizes the installment amount in advance to ensure it is met on its specified date. At other times, the customer changes jobs to an employer that pays the salary later than the installment date according to the contract, and here the bank seizes the available balances in the account before the salary is deposited from the new employer."
Gazi pointed out that "in this case, the customer can request the bank to change the deduction date to match their new salary date." He continued, "The customer themselves is obligated to manage their financial affairs in advance before their due dates." He explained, "If they have a school check or rental, they can arrange it in advance in a way that does not conflict with their monthly banking obligations." He noted that "such cases are not considered a problem, but if there are other issues, the customer can file a complaint with the bank."
