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Most of you here are aware about the thought provoking isssues involving the banking industries and its consumers. (Ref: gulfnews). This is the hot topic now all over UAE after authorities warned some banks over granting unsecured loans to its consumers, and sending them to jail for unpaid debts.

Is it moral or right to put someone behind bars for consumer debts?Whom to blame now?

a. Banks & its banking system

b. consumers

c. agents, who sell credit cards, loans and other consumer banking products (sometimes they're annoying for their hard selling style)

d. media for its propaganda etc

e. somebody else, who?

It's multiple choice but requires explanation. Let's talk and discuss. Share us your experience.

ASC here, trying hard to be your talk show host.

al qaida -> its all their fault

xibit wrote:al qaida -> its all their fault

Out of topic. Try Again, its multiple choice. You can choose any of the letters above, if you can't explain your answer. I'll accept that.

asc_26 wrote:

xibit wrote:al qaida -> its all their fault

Out of topic. Try Again, its multiple choice. You can choose any of the letters above, if you can't explain your answer. I'll accept that.

out of the topic? how come

i choose (e) sombody else and that some body is no other than al qaida.

and i can explain my answer as well.

us attacked iraq and afganist because of them, crude oil price rose, things became expensive, people became poor, took loans, couldnt pay them off, hence landed in jail.

thus al qiada

Just an observation:

Employees (expats & locals) could easily avail loans from banks and credit limits as high as 5 times their salary. The problem comes in during the collection period. Banks would send/refer their clients/banking consumers to the police for any unsettled outstanding dues. Worst, the person will land in jail.

Who is at fault? The banks that grant loans or credit cards with credit limits, as high as 5X from what the customer’s earning (salary) or the customers who availed the loan? How about the agents, who sell bank products?

Banks would say, it's not their fault, but what about corporate responsibility towards their patrons/customers. Do they have this?

Have your say.

The retarded people who think they can buy everything....cant they just admit to themselves they are poor and need to work for many years before buying a new 2007 BMW.

Not_Sure wrote:The retarded people who think they can buy everything....cant they just admit to themselves they are poor and need to work for many years before buying a new 2007 BMW.

But it is the bank that grant them huge amount of loans, and now banks are sending them to jail for unable to pay the loans. Do you think bank has the full responsibility for this?

PS: Talk show host don't argue with the guests, she'll facilitate the discussion only.

asc_26 wrote:

Not_Sure wrote:The retarded people who think they can buy everything....cant they just admit to themselves they are poor and need to work for many years before buying a new 2007 BMW.

But it is the bank that grant them huge amount of loans, and now banks are sending them to jail for unable to pay the loans. Do you think bank has the full responsibility for this?

PS: Talk show host don't argue with the guests, she'll facilitate the discussion only.

People have the responsibility to themselves to live within their means.

Banks could be more responsible, but people can't cry foul if they live on borrowed time/money.

I would say the consumers themselves

People should try and stop living beyond their means. If you cant afford it dont take it , period.

People should be educated of the outcome of taking a loan and what they might face as a result of nonpayment, banks are not going to do that, so who will?

Jeevan wrote:I would say the consumers themselves

People should try and stop living beyond their means. If you cant afford it dont take it , period.

People should be educated of the outcome of taking a loan and what they might face as a result of nonpayment, banks are not going to do that, so who will?

Are you talking about the Lebanese again?

You guys made a great point. However, most of the consumers who availed the loan don't know the hidden costs/interest behind any schemes, which the banks are offering them. The average people will never understand how their loans & interest being computed by the bank, and they will just wake up one day, their debts are ballooning. And these people will most likely go to jail.

Here comes another agent, who will offer the transfer of loans to their banks etc.. and again, the same scheme is happening. Agents will do anything, so that loans will be transferred to the bank (where he/she's working), because of commission they'll get from it.

Whom to blame now? Who's at fault?

Jeevan pointed out education about personal finance management. This is ok if all of us studied finance. How about the others? It's like a nightmare to some, they become millionaire & suddenly landed in jail.

Banks have the full responsibility, because they can determine the applicant's capacity to pay etc. before approving any credit cards or loans.

Another observation: Banks here don't promote savings. Most of the advertisement we see are encouraging the public to go to the bank & borrow money. Hmm...is the media to be blamed?

Your thoughts..

LOL yorky nope, dont want to face their wrath

ASC people dont need to be educated in finance, its just about probing, asking the sillest questions that come to your mind if u want to save yourself from landing up in jail in the future .

people who want to save dont need advertisements on saving they will save at the end of the day no matter what

I laugh when I see those "Take a loan and win a vacation!" ads.

Jeevan wrote:LOL yorky nope, dont want to face their wrath

ASC people dont need to be educated in finance, its just about probing, asking the sillest questions that come to your mind if u want to save yourself from landing up in jail in the future
people who want to save dont need advertisements on saving they will save at the end of the day no matter what

True, but I think there should be corporate social responsibility amongst the banking sector, not just maximizing profits at the expense of the poor and average people.

Weak people could easily bite whatever tempting offers are there to offer without considering its hidden costs & long term responsibilities. I remember, there’s an ad (forget which bank) about an employee asking his employer for an increment, but the employer is suggesting him to go to the bank, because they’re offering hassle free financial assistance. This kind of advertisement is I think misleading. gtmash pointed one ad too.

damn:) you got debtors' prisons? i love my constitution-no debtor prisons here-can not be put to jail for not paying debts, time to join civilization?:)-no offense meant:), Rob NJ.

Debt is all about education.
All over the world, these loan companies pray on mis-guided, or ill-educated peeps who have spiralled out of contrl into the debt abyss.

I ithnk you're right. Banks DO have an obligation to run suitable checks on people before they hand out barrels of cash. Not sure what the local procedures are, but surely the intetnational banks adhere to international rules on this, don't they ?

g00se wrote:Debt is all about education.
All over the world, these loan companies pray on mis-guided, or ill-educated peeps who have spiralled out of contrl into the debt abyss.

I ithnk you're right. Banks DO have an obligation to run suitable checks on people before they hand out barrels of cash. Not sure what the local procedures are, but surely the intetnational banks adhere to international rules on this, don't they ?

The international banks here are nothing more than franchises run by the same idiots who run all other banks here.

GTM -
REALLY ????
Geeez ! I AM shocked ! I thought these high street names would be even MORE protective of their reputations around the globe ?

Although, having thought about it, my experiences here in AD and DB have been pretty tame compared to some of the banking horror stories I've heard.

Well, I think those who got loans from banks should be responsible enough in making their payments up to date so there will be no hassles...its just a matter of choice (to get a loan or not) and a matter of being responsible of ones obligations.

It will be interesting to see what the banks do when people start defaulting on their home loans

I see no harm in banks taking legal action against personal loans. but the charges should be reasonable and based on a case to case basis.. now I know it would run into NPA and accounted in losses for the bank in countries with tax system.. dunno how it works here..still these cases should be dealt on a case to case basis. The worst on part of banks.... what i've seen / heard is abt agricultural loans.. there've been many suicide deaths due to the humiliation people (mostly low earning farmers) have to suffer if they fail to re pay the loan, whatever the reason may b.

g00se wrote:GTM -
REALLY ????
Geeez ! I AM shocked ! I thought these high street names would be even MORE protective of their reputations around the globe ?

Although, having thought about it, my experiences here in AD and DB have been pretty tame compared to some of the banking horror stories I've heard.

You will find enough complaints abot HSBC et al in the Black List forum here. Not surprising, considering all banks hire from the same pool of "talent."

Truth be told though, I never had a MAJOR problem with my local bank (MeBank). But then again, I've never applied for a loan.

gtmash wrote:

g00se wrote:GTM -
REALLY ????
Geeez ! I AM shocked ! I thought these high street names would be even MORE protective of their reputations around the globe ?

Although, having thought about it, my experiences here in AD and DB have been pretty tame compared to some of the banking horror stories I've heard.

You will find enough complaints abot HSBC et al in the Black List forum here. Not surprising, considering all banks hire from the same pool of "talent."

Truth be told though, I never had a MAJOR problem with my local bank (MeBank). But then again, I've never applied for a loan.

I don't think you will get a problem even with a loan, providing you pay on time.

Fifteen years ago, we faced the same issues. We had discussions with the municipality, nothing happened. We had discussions with the Central Bank, nothing happened. Then an order was issued by HH Sheikh Mohammed to play this role in curbing the problem," said the Dubai Police General Commander His Excellency Lt General Dhahi Khalfan Tamim. He is of course referring to the growing credit risks that banks and companies in the UAE continue to face. Last Wednesday, however, the UAE‘S first credit bureau, Emcredit, was launched, offering banks, companies and individuals precise information on borrowers.
So how will this help curb the issue of bouncing cheques?Lt General Tamim noted that the number of reports issued from the Dubai Police on bounced cheques had risen from 11,383 in 2002 to 16,715 in 2006. The police department's agreement with Emcredit, however, will break ground for the launch of Embounce, a new service specifically dedicated to providing clear and updated records on defaulted cheques reported to Dubai Police. This will enable lenders and various businesses to assess the risks associated with borrowers and partners by accessing their previous records in honouring cheques.
The move is expected to boost the level of transparency in the local financial and security sectors, one of the main objectives laid out in the Dubai Strategic Plan 2015."In a fast-growing economy like Dubai, curbing financial offences is a key priority for us in order to safeguard the interests of the financial and commercial sectors and the people of Dubai. Cheque offences place a large burden on the police and public persecution departments," said Lt General Tamim.He added that Embounce would allow creditors to better assess the credit worthiness of a cheque issuer and, in the long run, reduce the incidence of dishonoured cheque offences. The number of borrowers from banks and financial institutions has increased dramatically over the past few years in the country. The reason behind this, Lt General Tamim believes, are the increasingly luring incentives offered by banks to borrowers and the extreme ease with which you can obtain a personal loan or mortgage, for example, with borrowers in many cases failing to pay back the full amount. As a result, those institutions end up running to the police for help.Certain cases have proved difficult for the police to follow up. Lt General Tamim recalls a particular case, in which a foreigner arrived in Dubai, obtained a visa, set a bank account and was given a cheque book. He then proceeded to produce cheques as payment in different retail outlets including jewellery stores. After succeeding in buying incredible amounts of assets the cheques bounced. This resulted in issues with the bank involved as well as the business owners affected by the scam.With Dubai Police's data shared with Emcredit and updated daily, this is bound to change, claim those backing Emcredit."Everyday, thousands of businesses make decisions based on an individual's or a company's credit history, making it vital for organisations to have access to accurate and comprehensive credit information that supports their decision-making capabilities," said Ali Ibrahim, board member and director of Emcredit and deputy director general of Dubai Department of Economic Development (DED).Mohammed Ali Alabbar, director general of Dubai DED and chairman of Emcredit is optimistic with the services offered by Emcredit, saying that they will "translate into better opportunities and better access to credit, which in turn will enhance their performance and spur further growth in the economy of the United Arab Emirates".Debt levels have been rapidly rising throughout the UAE. Bankers have reported that the average indebtedness of a UAE national reaches up to US$40,800 and approximately US$27,200 for expatriates. Personal loans in the UAE have increased by 13.2% last year, reaching US$7.4bn whereas loans obtained for business purposes have doubled to US$19.2bn in 2005, from US$9.7bn in 2004.In many cases, expatriates tend to leave behind their credit history when returning to their home countries. Debt collection companies are then hired in cases of large outstanding debts to track down the borrowers in question.
Article continue : http://www.arabianbusiness.com/index.ph ... mitstart=1

Anyone can help ???

What if a dubai resident will take a loan and leave the country and he won't pay the outstanding debt on the loan ???

Defaulter wrote:Anyone can help ???

What if a dubai resident will take a loan and leave the country and he won't pay the outstanding debt on the loan ???

I am guessing the issue will go to the central bank here and from there to the central bank in your country. Sooner or later, they will get you..