Warning issued to banks that fail to cooperate in Emirati debt repayment scheme

The Debts Settlement Fund, as decreed by President Sheikh Khalifa, has paid off more than Dh1.8 billion of loans to banks and has resolved the debts of 2,700 Emiratis since its launch.

Ahmad Al Zaabi, Deputy Minister of Presidential Affairs, says many banks had agreed to take part in the Debts Settlement Fund initiative, but some had not. Mona Al-Marzooqi/ The National

ABU DHABI // Banks have been warned that they face penalties if they do not cooperate in a scheme to help heavily indebted Emiratis settle up.

Ahmad Al Zaabi, Deputy Minister of Presidential Affairs, said many banks had agreed to take part in the Debts Settlement Fund initiative, but some had not.

“We advise the banks that have not cooperated yet with the fund to do so,” said Mr Al Zaabi during the launch of the fund’s headquarters in Al Jazeera Club stadium.

“If they continue to refuse to cooperate we will contact the Central Bank to publish the names of these banks. Decisions will be issued for the Government to not cooperate with these banks as well.”

Under the scheme, signatory banks agree to waive 50 per cent of debtors’ loans. The other half is settled by the loans fund, to be reimbursed by deducting payments from the debtor’s salary.

The fund was created after a directive by President Sheikh Khalifa on the 40th National Day, December 2, 2011, with an initial allocation of Dh10 billion.

Mr Al Zaabi said that since its launch, it had resolved the debts of 2,700 out of 6,000 applicants, paying more than Dh1.8bn to banks.

He said the problem of unpaid loans, which resulted in lawsuits against Emiratis, was the banks’ fault as they had made it too easy to seek large loans that customers probably would not be able to pay back.

The fund pays for those who had lawsuits or police reports filed against them by banks before the initiative’s launch.

Emiratis can now go to its headquarters for assistance instead of registering at their banks.

On Tuesday, the first day of operations, the centre received 22 customers. On Wednesday morning it had already dealt with 19 more.

Among them was Suleiman Al Houssni, 42, who had racked up debts of Dh2 million over two years.

Mr Al Houssni left the centre smiling after being told he may be eligible for the scheme.

“I have been accumulating bank interest and court procedures take a very long time,” he said. “I filed a complaint against the bank because they take an interest rate of more than 60 per cent and this is against the law.

“This centre said they would look at these procedures and then explain in detail what documents I am missing.”

Salem Al Mezaini, a 66-year-old who had retired from the Armed Forces, explained his case.

“I was held in jail for four months because of financial lawsuits and then was only released after the decision regarding the fund was announced,” Mr Al Mezaini said.

He did not know the value of his debts, only that he had until February 5 to pay them off, and was unsure about how to use the fund.

Mohammed Ali, a government employee, has been trying to apply to the fund since 2011 after his cheque for Dh475,000 bounced.

Mr Ali, 31, said he had sent 60 emails to the fund – as it turned out, to a defunct address – and tried without success to apply through the bank.

After speaking to an adviser, he was referred to another department next week.

Abdullah Al Ali, 52, said he owed debts totalling Dh1m to three banks, and hoped they would sue him so he could apply to the fund.

“Their lawyers keep calling me but there is nothing I can do. I told them to file a lawsuit so I can take my case to the fund but they refused,” Mr Al Ali said.

“Obviously, they don’t want to give up 50 per cent of the amount.”

He was told the fund’s conditions meant he was not eligible until a legal case was filed against him.

The centre is open from 8am to 2pm, Sunday to Thursday, and can accommodate about 100 cases a day.

Applicants should book an appointment by visiting www.nddsf.ae, then wait for a text message with their appointment date and time.