Dubai – Know your legal rights if your salary has been reduced due to the Covid-19 pandemic.
Question: I have a personal loan worth 70,000 DhDh from a bank in Dubai. I had a payment deferral in June for four months because I was on a 50% pay cut due to the coronavirus pandemic. But my company still has not reinstated all of our salaries and my bank is not ready to extend the deferral. I can only repay the loan if I am paid in full. What legal help can I get?
DO NOT MISS :
Answer: According to your request, it can be noted that by making use of a personal loan (the Loan) from the bank (the Bank), you become responsible and responsible for paying the installments (the IMS) on time. timely, even if your salary has been reduced.
It can be noted that no matter if your salary has been reduced or your salary has been reinstated, you are still held and responsible to repay the loan. In the event of default on your part, the Bank’s claim for the unpaid amounts against you will remain.
In addition, the Bank may attempt to invoke all of the loan repayment security conditions set out in the “Personal Loan Agreement” in the event of default, which may include cashing a security check issued by the Bank. borrower in favor of the Bank against the Loan.
Assuming that at the time of use of the Loan, you had issued a security check to the Bank, the Bank may choose to deposit it for collection in the event of recurring non-repayment of the EMI.
Subsequently, in the event that your bank account does not have the required balance as the amount of the check, the security check will be refused.
It should be noted that in the United Arab Emirates it is a criminal offense to refuse a check. This is in accordance with article 401 of Federal Law No. (3) of 1987 on the promulgation of the Penal Code, which states: “Detention or a fine shall be imposed on anyone who, in bad faith, delivers a draft without pay. sufficient and drawable or who, after delivering a check, withdraws all or part of the balance, rendering the balance insufficient for payment of the check, or orders a non-drawee to cash a check or makes or signs the check in a manner that prevents it from being cashed.
“The same penalty is applicable to anyone who endorses a check in favor of another or gives him a bearer draft, knowing that there is not sufficient balance to honor the check or that it is not drawable. “
In addition to the above, it can be noted that under Law No. (1) of 2017, the “Criminal Order Law”, if the amount of the check is less than 200,000 DhAED, the penalty may be a fine and the fine may vary between Dh2,000 and Dh10,000, depending on the amount of the check.
In view of the above, it may be prudent for you to approach the Bank to negotiate and revise the loan repayment terms until your salary is restored by your employer.
The revision of the repayment terms would depend on the mutual agreement between you and the Bank as well as the Bank’s policy on repaying personal loans.
Ashish Mehta is the Founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practice law in Dubai, UK and India. All the details of his practice on: www.amalawyers.com. Readers can email their questions to: [email protected] or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.