It should be noted that in the UAE, when a personal loan or a credit card facility is granted to a borrower, banks or financial institutions may collect cheque/s as security against the loan amount.
Failing to pay three consecutive installments or six non-consecutive installments on the repayment of your personal loans or credit card facilities may be considered an event of default, in accordance with Article 4(4) of the Personal Loan Agreement format appended to Notice No. (3692/2012) of the Central Bank of the UAE.
The Article 4(4) of the Personal Loan Agreement format, approved by the Central Bank of the UAE, states that: “The loan elapses and all the installments, interests and any other fees and expenses become due and payable immediately without having to give any notification or any court ruling and without prejudice to any other rights of the bank according to this agreement or in accordance with the law – in the event that the borrower failed to pay three consecutive installments or six non-consecutive installments of the monthly installments without approval of the bank.”
Source – Khaleej Times – Read the full article here