Michael Gomes, an Indian communications professional, recently relocated to India after spending 40 years in the UAE.
He advises people moving out of the UAE to clear their dues and close their bank account before exiting the country.
“Clear your credit card dues, close all cards and settle loans linked to your account for auto debit or provide a new repayment method,” Mr Gomes says.
“Cancel any recurring payment standing instructions or any direct debit you have set up, such as the Dubai Electricity and Water Authority account bill, among others.”
“If you have dues, the bank will freeze your account once it receives the final payment from your employer.”
It is better to close your bank account while you are in the UAE, Mr Gomes says.
What is the account closure process?
Go to a bank branch, fill in an account closure form and sign it, hand over all your cards and chequebooks and attach a copy of the employer’s final settlement letter and copies of all clearance letters from companies whose bills were linked to your bank account, he says.
“The process is very easy if you are in the UAE, just follow all the instructions and the account can be closed. Once you leave the country, everything has to be done via email or WhatsApp and that’s not easy,” Mr Gomes says.
“I initiated account closure after reaching India. I had to physically fill the account closure form, take a PDF copy of it, attach a self-attested passport copy and copy of my visa cancellation, and send it via email to the bank.
“I have requested for a clearance letter, which will be issued after verification by the bank. It should take between a week to 10 days to close the account and receive the clearance letter.”
Is a branch visit required or can it be done online?
No bank account closes automatically and it is the responsibility of the person to notify their bank of any actions required, says Keren Bobker, an independent financial adviser and senior partner with Holborn Assets in Dubai.
Leaving the UAE can often be somewhat overwhelming, not just with the list of things that need doing but due to the emotional aspect as well.
Closing your bank account is one of those things, says Rasheda Khatun Khan, a wealth and wellness expert, founder of Design Your Life and the author of Millionaire Mindset – 6 Steps To A Wealthy Life.
“The first thing to do is to make sure all loans and credit cards are cleared and no money is left owing. Be sure to request your no liability letters,” she says.
She says this should be done as soon as possible as the process to close the account can only begin once the letters are received.
“This is usually where it gets complicated – when money is still owing and you’re waiting for your liability letter,” Ms Khatun Khan says.
You can also call a bank’s customer care hotline to know about steps for account closure.
Most banks in the UAE require that you visit a branch in person to initiate the account closure request.
If you are abroad, some lenders allow you to apply for account closure from your registered email address. In the email, mention the details of the account you want to close and the reason for the closure.
A customer cannot ask someone else to close the account on their behalf, according to Emirates NBD.
If you are closing a joint account, all the account holders must be present at the branch together, the bank says on its website.
What documents do you need?
You will need to take a photo ID such as a valid Emirates ID or passport, as well as debit and credit cards linked to your bank account and any unused cheques or chequebooks.
Try to close your bank account as soon as possible, especially before your Emirates ID expires, Ms Khatun Khan says. This is when it can get complicated as an expired ID can limit access to accounts, she warns.
You will have to fill basic details in the account closure form, such as the type of bank account you have and the reason for closure.
In some cases, customers can ask for the transfer of funds in the account while filling out the form. Submit the form along with your ID at the bank’s customer relationship counter.
Upon closing your account, unused cheques and debit cards must be returned to the bank. In case you do not submit them, the remaining cheques and card may be deactivated as part of the process to close the account.
And the gratuity payment?
If you have a loan, most banks may place a lien equal to the outstanding loan amount on the gratuity payout while the customer provides details of their visa status.
Some banks also automatically freeze the gratuity payment due to the limit on a customer’s credit card, regardless of whether they have any payments owed or not.
This is due to the credit limit automatically registering as a liability in the customer’s name, says Alison Soltani, founder of Leap Savvy Savers.
It is advisable to have accounts with two different banks in case one freezes your account when you quit your job, recommends Steve Cronin, founder of DeadSimpleSaving.com.
As soon as the employer issues a clearance letter, the bank will release the gratuity payment and the amount will be credited to the customer’s account.
However, the customer must ensure that they settle all dues, both with the employer and the bank, to gain access to their gratuity payout.
Do you need to transfer funds?
Withdraw all your funds from the account you are closing. Banks can only close an account with a zero balance.
Check what your bank's cash withdrawal allowance is.
“Either transfer your whole balance to another account before going to the bank or draw it out at the counter during the account closure,” Ms Khatun Khan says.
“Usually you can complete the account closure during this one visit to the bank.”
Customers should print or download their bank statements since the online statement history will not be available once they close their account, Emirates NBD warns.
Ms Bobker says closing bank accounts before permanently leaving the UAE is “the right course of action for the vast majority of people”.
However, it is also wise to ensure that you have soft copies of your account and credit card statements for at least the past year, if not longer.
“They will be required if you need to apply for a mortgage or personal loan in the new country of residence,” she says.
Request for clearance letter
If you need a clearance or no liabilities letter, you can request for one from the bank. It is recommended that foreigners leaving the UAE apply for this document.
To receive a settlement of liabilities letter, the customer must submit a signed request form, maintaining the fee amount in the account, according to Emirates NBD.
However, the bank may ask for other documents on a case-by-case basis.
How many days will the process take?
Your bank account should be closed within three to five working days, according to most banks, so it is recommended to initiate the process a week before leaving the UAE.
Ensure that you have enough money with you to complete all other procedures required.
You will receive confirmation from the bank on your registered email address and mobile number informing you of the account closure.
Is there a fee for account closure?
Customers can close their bank account in the UAE free of charge.
Your bank might require you to pay a fee if you are closing the account less than six months from opening it.
Emirates NBD will charge a fee of Dh100 if the account is closed within six months of opening. For accounts opened more than six months ago, there are no fees or charges for closure.
What happens if an account is not closed?
In most cases, if there is no activity on a UAE bank account for a period of six months, the account will be marked as dormant, thus effectively frozen, Ms Bobker says.
However, this does not mean that there will be no charges applied to the account, she says.
Most banks will render an account dormant and freeze it if there is no activity for a certain period of time. This could be anywhere from six to 24 months, according to Ms Soltani.
“Some banks will charge a 'maintenance' fee on any account, even one that is inactive, especially if they are not receiving monthly salary payments,” Ms Bobker says.
“The same applies to credit cards, perhaps even more so, as most cards have an annual fee and even if the card is not being used, the fee is chargeable.”
If your account has been frozen and you need to request to close it, you must first activate the dormant account, according to Emirates NBD. Withdraw funds in the account before asking for it to be closed.
