There are many reasons why non-residents choose UAE banks to open their bank accounts. High reliability of local financial institutions, low maintenance costs, and simplified requirements are among those. But what about the situation when you want to close your account, or even a worse scenario – your bank closes your account? In the article, we will take a look at possible scenarios for closing accounts in this country and how to act in particular situations. So, let's take a closer look at the related scenarios in the banking industry in the UAE.
Bank in UAE decided to close your account
Indeed, the requirements for accounts holders in the UAE are much less strict than those in Swiss banks, for example, but you should not ignore them and forget about your obligations and in no case you should conduct any illegal transactions with your account. Can a bank close your account without notice? Yes, banks close accounts without notice in case of violation of the law, or the breach of the contract clauses with a bank. So let's consider these cases. Why does bank close your account without a notice and when can it happen? A local financial institution can block or close your account with money in it and without any notice. Here are the main reasons why a bank in Dubai can close your account:
- Conducting illegal transactions, such as attempt to launder money. The Central Bank of the UAE considers it extremely important that funds obtained by illegal means abroad should not to participate in the local financial system. In order to struggle with these illegal actions, the Central Bank has issued the special decree ordering commercial banks to prevent the attempts of conducting suspicious transactions. Money laundering is considered a transaction aimed at concealing and/or changing the origin of illegally obtained money, so that it seems that the funds that came from a legitimate source. The decree also describes strategies for identifying funds which may be related to financing of criminal activities. According to the requirements, the UAE banks check all the information and documents that are required to perform banking operations. They include verification of ID-cards or passports of individuals, verification of a license, certificate of registration, and information about shareholders, in the case of a legal entity - the verification of compliance rules and identity of the signatory. The local bank will never open an anonymous account for you. If the bank reveals illegal operations, your account and all the money on it will be blocked, and this may lead to further proceedings with law enforcement agencies.
- Failure to comply with the minimum balance on the account. From year to year, banks toughen the verification procedure and requirements for accounts for non-residents. Not all the banks of the UAE will open a personal account for a non-resident. And in those banks, where it is possible, there are quite strict requirements for the minimum account balance. This minimum balance in the accounts of non-residents in the Emirates NBD (ENBD), Noor Bank and Mashreq Bank is from 100,000 to 300,000 dirhams. If at some moment there are less funds in your account, it can be blocked or closed.
- Information discrepancy. When you open an account in a local bank, you submit the list of documents proving your identity and the origin of your funds. If this information changes, for example, you change your place of residence, you must notify the bank, otherwise, it may be suspicious, and your account may be blocked until the circumstances are checked.
- Lack of account transactions. If you do not use your bank account in the UAE, but want to leave it for the future, you should conduct at least minimal operations from time to time. Otherwise, if there will be no movement of funds in your account for several months, your bank may close your account as it sits idle.
In any case, it is important to remember the most important thing – the compliance with the law and compliance with the requirements of the bank secures that you shall not have troubles with the bank. If you you do everything correctly and transparently, there shall be no complications for you.
You want to close your account in the UAE bank
Those who want to close their bank account are interested in the following questions: «How long does it take before a bank closes your account?», “How to know if a bank account is already closed?”, “What happens when a bank has closed your account, and somebody transfers money to a closed account?”. The answers are simple: the whole process of account closing takes regularly around 5 days (in case there are no problems with debts); when a bank closes your account, you will get a notification on that; when your account is closed, no money can be transferred to it, so your partner who makes a transfer to such account will get a payment return.
What about the situation when you just do not need your account in the UAE anymore? Never leave your account active. Banking disputes are the main cause of problems in the departure area of local airports. Before you fully close your bank account in the UAE, you must make sure that all loans and credit card debts are repaid; you have to deal with all bank checks drawn on the date and pay all banking services for account maintenance. Take time to properly close your account. You should not simply withdraw funds from there and leave it empty, since, in this case, a monthly account maintenance charge would apply which would result the negative account balance. Account must be closed. If you do not pay your bills and your loans and debts on credit cards, or just keep your account with negative balance, then you may face an unpleasant surprise at the next visit of the UAE or going through the country. It is always necessary to request a confirmation from the bank, which confirms the absence of any obligations when closing your account in the UAE.
How to close a business bank account in the UAE? You have to go through the standard procedure in a few steps; it only takes a few days for the whole process.
Private account closing
The procedure of closing bank account in the UAE is as simple and understandable as its opening. And it is described in your contract with a bank. In order to close your account, you have to transfer money from it and make a request to account cancellation. How to do it? Write a closing letter of the standard format. So, here is an approximate procedure.
- Withdraw the rest of your money from your account (if this is a credit account – pay off your debts). The balance of funds can also be transferred to another account in another bank if you are abroad and it is difficult to withdraw your funds. If you do not do this, your bank will choose the form of the refund of your funds by itself; it has one week for that. You should also make sure that you pay all the account maintenance fees and do not owe anything to the bank. If this is not done, the bank may make a complaint to you after some time.
- When the balance is zero, you can write a request to close your account. To do this, you can contact any branch of the bank. After submitting your documents and an application, your account will be closed (typically within one day). If there is still money there, it will be closed the next day after they are withdrawn.
Legal entity account closing
Now let us take a look at a process of closing a bank account for a legal entity. How to close a corporate bank account in Dubai and what is needed for that? The steps and requirements for that are pretty much the same as for private persons. Although the requirements in different banks may differ, the main list of documents that you need to submit to your bank is approximately the same. When visiting a bank, the manager of a company is required to present a full package of documents for his company and his identity card. A standard closing request is also to be submitted.
If your account was opened less than a year ago, you may have to pay additional fees. How much does it cost to close a bank account in this case? Depending on the bank, this amount may be several hundred dirhams (usually up to 500 dirhams).
As you can see, there is nothing difficult on the points above, you just have to follow the standard procedure, and you will avoid any problems with your UAE bank account.