After banks refused to grant new financing to dealers

Bankers: Stopping payment without proving being affected by "Corona" is deprived of loans

  • Banks are obliged not to grant new funds until the credit rating is adjusted.


  • Ahmed Arafat: "Banks take into account the high degree of risk for defaulting dealers, or who have stopped paying."


Bankers said that dealers followed poor behavior during the outbreak of the new Corona virus (Covid-19), and stopped paying their monthly obligations, whether they were mortgage or credit cards, which negatively affected their credit reports, and thus prevented them from obtaining loans New.

They explained to "Emirates Today" that these dealers invoked the facilities provided by the banks and the initiatives directed by the Central Bank regarding the relief of borrowers affected by the pandemic circumstances, but they did not provide evidence of their impact on its repercussions, such as leaving work or reducing their salaries.

They pointed out that the banks are obliged not to grant them new financing, until adjusting their credit assessment, in accordance with the instructions of the Central Bank, which is obligated to inquire about the customer and ensure his creditworthiness.

The newspaper had received complaints from dealers related to the refusal of banks they deal with, to grant them new funds, and their tightening after the Corona pandemic.

Banking facilities

In detail, the banker, Ahmed Arafat, said that banks provided many facilities for those affected by the "Covid-19" pandemic, as the monthly installments due from them were postponed, at a time that did not affect their credit evaluation.

He added: “Unfortunately, there is a group that took advantage of the special circumstances of the repercussions of (Corona), and stopped paying their financial obligations, whether towards credit cards or real estate mortgages, and at the same time, they did not present to the banks with which they deal with evidence that they were affected by the pandemic, so this appeared in their report. Credit rating, and reduce their evaluation number ».

Arafat explained that "banks take into account the high degree of risk of defaulting dealers, or those who have stopped paying, and there are clear instructions from the Central Bank that it is necessary to verify the creditworthiness of the dealer, and to inquire about him with Al-Etihad Credit Bureau."

And he stressed that the stop of the customer for a period of three consecutive months from the payment of his bank obligations reduces his credit evaluation number, and it takes a waiting period ranging between six months and 18 months, so that the credit evaluation number can be modified and raised again, after the payment of what he owes. arrears.

Committed dealers

In turn, the banker, Muhannad Awni, said that banks do not strictly except with the dealer who does not meet the terms of lending, pointing to the presence of dealers who obtained the maximum permissible limit for financing, while others stumbled or stopped payment due to the repercussions of the Corona virus, and those who have not proven Some of them were entitled to the facilities provided, his credit report was negatively affected, and his evaluation number decreased as a result of his non-compliance.

Awni stressed that committed dealers, and those who meet the terms of lending to them, can obtain bank financing easily. As for those who make sure that the bank is unable to repay, it is natural to have strictness with it.

Exploitation of facilities

In the same context, the banking expert, Sheikha Al-Ali, said that the labor market has been greatly affected by the repercussions of the Corona pandemic, pointing out that banks take into account risk management, in a way that guarantees the ability of the dealer to repay.

She emphasized that the sectors that were not affected receive easy, fast and unimpeded financing for their employees.

Al-Ali explained that «there are dealers who have taken advantage of the facilities provided by banks and the Central Bank, related to those affected by (Corona) in a wrong way, and claimed that they were affected by the repercussions of the pandemic, without providing proof of this, whether it is related to dispensing with services, leaving work, or reducing Salaries, and unfortunately, they stopped paying credit card dues or mortgage loans, which negatively affected their credit evaluation, and thus prevented them from borrowing again. ”

Al-Ali warned that all banks provide the credit information company with all the customer data, and therefore any delay in payment, stopping, or default appears immediately in the credit report, and the evaluation number is lower than the permissible limit for taking new funds.

And she stressed that every customer must pay his financial obligations periodically without delay, in order to maintain a good rate for the credit rating number.

She pointed out that stopping payment obliges banks to set aside provisions that affect profits. Therefore, risk departments in banks tighten standards for lending to non-obligors, even if it is a credit card installment, bounced check, water and electricity bills, or “communications” services.

Sectors that have not been affected receive concessional financing for their employees.

If the customer stops paying his monthly obligations to the banks, the credit rating decreases.

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