Abu Dhabi Judiciary: In some cases, money is disbursed in exchange for a mere “personal guarantee”

Violation of the rules for granting loans will result in the non-acceptance of lawsuits filed by banks before Abu Dhabi courts

Abu Dhabi Judiciary: There is a large discrepancy between the value of the guarantee and the amount of the loan in some cases.

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The Abu Dhabi Judicial Department has again warned against granting banks and financial institutions bank loans to individuals and companies, without sufficient guarantees on the ability of the borrower or his guarantor to pay, as this is considered a breach of the requirements and controls regulating granting loans, which may result in the non-acceptance of the lawsuits filed. From banks before the Abu Dhabi Courts.

This comes in light of the noticeable increase in the number of disputes and lawsuits restricted from banks against individuals and companies, which showed through the consideration of a large number of them, that the guarantee is not equal to or proportional to the loan, and there is a large discrepancy between the value of the guarantee and the amount of the loan, and in some cases, the disbursement of Money for just a personal guarantee.

The Abu Dhabi Judicial Department warned of the need to adhere to the requirements for granting loans, and to obtain sure guarantees that the borrowers have the financial ability to pay them, in accordance with the established regulations that are subject to oversight and scrutiny by the regulatory authorities in the country, in order to ensure the acceptance of cases before Abu Dhabi courts and the implementation of judgments issued against debtors. .

For her part, Legal Adviser, Shawq Al Kathiri, said: “The warnings from the Abu Dhabi judiciary are related to the necessity of complying with the requirements for granting loans, and obtaining sure guarantees that the borrowers have the financial ability to pay them, in accordance with the established regulations that are subject to oversight and scrutiny by the regulatory authorities in the country, in order to ensure Accepting cases before Abu Dhabi courts and implementing judgments issued against debtors, in order to activate and confirm the validity of the provisions of the decree issued on 27/2/1995, so that banks and financial institutions bear legal responsibility in the event of their uncertainty, before submitting them. loans, that the person requesting the loan is able to repay it, using all available means and means for inquiry, taking into account the proportion of the facilities with the income.

Adequate guarantees

"Emirates Today" published, the day before yesterday, a circular in which the Central Bank called on banks operating in the country to comply with the requirements for granting loans to individuals, and to ensure that there are sufficient and confirmed guarantees on the borrowers' ability to pay, and that the credit facilities granted to them are commensurate with their monthly income, stressing that That granting them these loans without these guarantees is a regulatory violation of the Central Bank law and other relevant rules and regulations, and the “Central” indicated, in its circular No. (3944 / 2021), that Emirates Today obtained A copy of it, to a statement from the Abu Dhabi Judicial Department that it does not accept any lawsuit before the Abu Dhabi courts, filed by banks and finance companies related to this aspect, and that judgments issued against individual debtors will not be implemented, if it is proven that they did not provide guarantees to repay the loan to the bank.

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