Banks Freezing End of Service Entitlements

Job changes bring with them their share of surprises-like, for instance, the bank freezing your final settlement. This can happen when the new employer's name is not listed with the bank, and this forces the latter to take precautionary action, even when you are able to service your existing loans.

In the UAE, the banks have the right to deduct your end-of-service benefits from the agreement that exists between you and the bank that provided the loan. Therefore, knowing these details would make all the difference for you in how you approach this situation.

There are mainly two situations:

• Freeze Permitted by Contractual Provisions: A large number of loan contracts include a minimum salary clause therein. Should the new salary be below that minimum threshold, the bank could use this to freeze your final settlement and would justify its interests against the release of recovery under UAE laws such as Article 715 of the UAE Civil Transactions Law.
• Absence of Such Provisions: If there are no minimum salary-related clauses, then it may well be that if you are up to date on loan repayments, the bank has no right to freeze your money.

Being proactive and knowing your rights will come in handy in dealing with such hurdles while joining a job.

To know more about your rights and options related to bank freezes on final settlements, read the full article.?https://lylawyers.com/banks-freezing-end-of-service-entitlements/