UAE: When can a bank close a customer’s account without prior notice? – information

question: Can the bank close a resident’s bank account without any explanation? A friend of mine closed his account and the bank called it an “internal policy.” How can he complain about this?

Reply: According to your inquiry, since your friend’s bank account was closed without providing a valid explanation, the provisions of the UAE Central Bank’s Circular No. 8 of 2020 on Consumer Protection Regulations (“UAE Bank Customer Consumer Protection Regulations”) apply .

If a bank or financial institution in the UAE intends to close an account, it needs to notify the customer in writing at least 60 days in advance. This is in line with Article 5.1.2.2 (a) of the UAE Bank Customer Consumer Protection Regulations, which states: “A licensed financial institution closes an account:

A sort of. Licensed financial institutions must notify consumers in writing of their decision to close consumer accounts 60 calendar days before the account is closed. “

However, if banks or financial institutions discover or suspect illegal transactions or financial/white-collar crimes, they may close customers’ accounts without prior notice. This is in line with Article 5.1.2.2(b) and (c) of the UAE Bank Customer Consumer Protection Regulations, which states: “A licensed financial institution closes an account:

Licensed financial institutions must explain in writing the reasons for the closure, unless the licensed financial institution suspects that consumers use the account to commit financial crimes; and

C. If a licensed financial institution is acting in accordance with the UAE’s financial crime compliance requirements, an exception is provided. “

According to the above-mentioned laws and regulations, the bank has the full right to close your friend’s account when it suspects or discovers that your friend’s account has been used for financial crimes or illegal transactions.

However, if your friend’s bank account frequently undergoes financial transactions and is closed without justifiable reason, he can file a written complaint with the bank. If the bank does not respond to the complaint, he can contact the Consumer Protection Department of the Central Bank of the UAE and file a written complaint.

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However, before filing a complaint, it is recommended that your friend check his registered email account to confirm that the bank has not sent any notifications about account closure.

Ashish Mehta is the founder and managing partner of Ashish Mehta & Associates. He is qualified to practice in Dubai, the UK and India. For complete details of his company, please visit: www.amalawyers.com. Readers can email their questions to: news@khaleejtimes.com or to Legal View, Khaleej Times, PO Box 11243, Dubai.