Indian Loan Defaulters & Fleeing from UAE to India: How UAE banks plan to tackle this?

For years, Indian expatriates who have been living in the UAE, have been working their way into paying debts and balancing their work lives. This has often happened without the timely intervention of Mortgage Debt Management to clear off dues in the UAE. This had reached its peak of disruption once the Pandemic struck the world.

Did you know how much NRI small business groups owe the UAE banks? It is about Dhs. 25 billion together from the years of 2015- 2021. The numbers are even bigger when the entire defaulter list is counted, but here we at Freed Financial Services are trying to guide such Indian defaulters on the gravity of the situation in 2022. In fact, most of our clients have utilized a loan restructuring program to revise the pattern of loan payments and thereby reduce their loan default situation.

From 2020 was a common sight to see many Indian loan defaulters travel back to India, in the hope of survival and also breaking the massive debts that were piling in their financial statements. Having said this, although the situation is pitiable, the UAE Banks couldn’t sit waiting for people to return these lump-sums when they felt comfortable.

India-UAE Judicial Enforcement for Loan Defaulters 

Over the pandemic, speculations, multiple discussions have led to the formulation of the 2020 declaration. Since India has found UAE as a reciprocating territory for years, and have announced that now it will be possible to take forward the UAE court judgments on Indian grounds.

The verdict issued in India stated that if a borrower has not been able to repay the loan in UAE (a foreign country), it will be considered an offense and the UAE banks can initiate actions against the crime via the diplomatic medium of law.

Are UAE Loan Verdicts Enforceable in India or No?

As per the latest rules issued in 2020, both UAE and India have mutually agreed that loan defaults cases that have been given in the UAE law courts can be enforced in India. This will help the UAE banks cope with the huge financial losses that have arisen from unsettled loans of people who fled from the UAE to India.

In reality, there is no escape and the wise route is to think of being part of debt settlement programs in the UAE that will point out solutions on what needs to be done in a timely manner.

How are the UAE banks planning to tackle this?

After continual discussions, some of the fundamental action plans include:

  • Appointment of Law Firms

Now UAE banks have appointed law firms and legal agencies in India to take care of the defaulters who had fled from UAE to India. With the help of the local agencies in India, the UAE banks can now track and recover the lost funds as per the International laws since March 2020.

  • Latest Loan Defaults Considered

Now, they plan to recover the latest loan defaults that were triggered in 2021, as those are easier to track and reach out to. Alongside, efforts are being made on finding how small business owners can return the loans on time. If delays are made again, it will be punishable.

How can Freed Financial Services in UAE help Indian Loan Defaulters?

The Freed Financial Services team helps to create a smooth pathway of expertise and guidance so that your financial statements get back on track and fall on the good side of the UAE banks.

  • Home loan restructuring

Our team will guide on loan defaulters can restructure home loans taken in the UAE. Even if you have returned to India, our proactive counseling sessions will allow you to manage the loans you would have taken and negotiate revised payment terms on your behalf with the banks

  • Debt settlement programs

Are you worried about how to manage your Home loan if your property value is lower than bank outstanding? At Freed Financial Services we have helped many of our clients free from debts. We help you sell your property and negotiate with banks the best debt settlement program incase the property value does not cover the loan outstanding .

  • Delayed projects settlement

Properties that you invest in often get delayed or cancelled, yet you have to make interest-only payments to the bank. If you don’t know how to approach the bank or developer and what your options are, we will communicate on your behalf

We discuss with the developer and get an update on the project status. We work out options like a refund or swap with the developer. Thereafter, we negotiate with the bank and create an ideal settlement plan to foreclose the loan

FREED’s team of debt management experts have more than 40 years of UAE experience in the banking and real estate sectors. They have helped hundreds of people by negotiating loan restructuring programs and debt settlement programs between borrowed and banks.