Policy & Legal Updates
UAE Banks Face Restrictions on Seizing End-of-Service Gratuity for Personal Loans
UAE banks may only freeze or deduct end-of-service gratuity to clear personal loans if permitted by loan agreements and Central Bank regulations. Central Bank rules prohibit lenders from withholding funds exceeding the borrower's debt or applying gratuity toward home loans. Employers also have no obligation to remit severance directly to banks without a prior written undertaking.
