If you recently resigned from your job and have outstanding loans or credit card bills, you might be wondering if your bank can claim your end-of-service benefits to settle the debt. In the UAE, personal loan agreements may include clauses that allow a lender to claim the borrower’s salary and end-of-service benefits.
According to regulations set by the UAE Central Bank, a personal loan agreement can specify that a borrower’s monthly salary and end-of-service benefits be transferred to the lender’s bank account. This is part of the standard terms and conditions for such loans. The agreement may include a provision that requires the employer to ensure these payments are directed to the bank during the loan period.
Additionally, if the lender perceives that an event, such as the termination of employment, could result in the borrower being unable to repay the loan, they are entitled to demand the outstanding balance immediately. This rule is outlined in the guidelines under Article 4 of the Central Bank’s Personal Loan Agreements Format. This means that, in the case of job termination, the lender might freeze your account to recover the debt once your end-of-service benefits are credited. 
In summary, banks can claim your end-of-service benefits if you have an outstanding loan, especially if there is a clause in your loan agreement stating that these benefits should be credited to the lender’s account. Always review your personal loan agreement to understand the terms and conditions regarding your salary and end-of-service benefits.
