Bankers listed seven main reasons why the customer's end of service benefits are insufficient, such as collateral for the personal loan.
They explained to Emirates Today that the most important of these reasons is the insufficient end of service bonus in terms of value, or requesting personal finance from a bank that does not receive the salary of the customer, in addition to the presence of jobs that do not include the end of service bonus, and prevent them from the embezzled employee. The company where the customer works does not commit to transfer the end of service benefits to the bank.
These bankers confirmed the banks' right to guarantee their funds through a check, or a set of checks signed by the customer, in order to ensure that he is obliged to pay the agreed financial repayment.
They explained to Emirates Today that the transfer of a national employee from one job to another is accompanied by the addition of periods of service. It is returned to him by ensuring that his new salary is sufficient to pay the remaining installments.
In detail, banking expert Ahmad Yusuf said that there are a number of cases where the end-of-service gratuity is not considered a guarantee of personal loan, such as that some customers receive financing from a bank that does not receive the salary of the customer, which means that the end-of-service bonus can not be used as collateral. The banks here sign a security check, or a certain number of checks according to each bank's policy.
He added that such cases are sometimes inadequate in terms of the value of the end-of-service gratuity, especially if the amount of the loan is large, and there are employees working in entities that do not give end-of-service benefits, such as some bank employees, and if they borrow or get financing, There must be a guarantor check for their money.
Yousef pointed out that the crime of embezzlement at work deprives the employee from the end-of-service indemnity, and these are all things hedged by banks, in case the customer applied for bank financing.
Yousef pointed out that the transfer of a national employee from one job to another, includes the previous periods of service, and therefore there is no reward that can be held by the bank, but in the case of expatriate employee, some banks are booked for the end of service gratuity, while some of the reward part of the reward, Or leave it full to the customer if his salary from the new work is sufficient to pay what he has, according to the balance of the loan.
For his part, banking expert Ali Darwish, said that the check is a guarantee only to oblige the customer to pay premiums to avoid legal accountability, but the end of service benefits are not entirely reliable, as it may not suffice, or that the customer works in a private or semi-government company Do not commit to transfer, and here must be an additional guarantee represented in the check to preserve the funds of banks.
He added that banks do not usually resort to the use of a security check, only after exhausting all friendly methods with the customer to get him to pay his dues.
Darwish explained that banks have the right to reserve the bonus if the financing of the transactions is still valid, and it has remaining installments, pointing out that this procedure is next to the security check, which banks consider as a tool to fulfill their right in case the customer fails to complete the payment, and after the bank has granted it Take time to look for another job, or arrange it.
In the same context, said banking expert Noura Kamel, banks are not satisfied with the end of service gratuity when granting personal finance, as there is no guarantee that the customer will continue to work, until the full payment, so, resort to the check, pointing out that some loans are The salary is not enough to pay.
She explained that what banks are doing in the UAE with regard to collateral, especially personal loans, is in place in most countries, unlike mortgages that have other collateral such as mortgage or land.
The banking expert, Muhannad Awni, said that the end-of-service gratuity is usually not enough if the customer has more than one financing.
The end-of-service gratuity also does not guarantee personal loans without salary transfers, which are usually high interest rates.
7 main reasons
- Borrowing from a bank that does not receive the customer's salary.
- Insufficient end of service benefits.
- Lack of end of service bonus in some jobs.
- The commission of the crime of embezzlement is deprived of end of service benefits.
- The Company does not commit to transfer the end of service benefits to its employees.
- The bank is not sure of the continuation of the customer's work.
- The presence of default due to the accumulation of debt despite the continuation of the client in his work.