When can a bank close a customer’s account without prior notice?
In accordance with Article 18.104.22.168 (a) of the Consumer Protection Regulations for the UAE Banking Customers on “Account closure by the Licensed Financial Institution”, banks or financial institutions in the UAE need to inform the customer in writing the reasons for the closure at least 60 days in the advance notice before the closure of the bank account, in order to shut down the bank account of the customer.
However, under Article 22.214.171.124 (b) of the Consumer Protection Regulations for UAE Banking Customers, a bank or a financial institution has the right to close the bank account of a customer without serving any prior notice in case the Licensed Financial Institution suspects or find out to the use of the account by the Consumer to carry out illegal transactions or financial/white-collar crimes.
Additionally, Article 126.96.36.199 (c) of the regulation, provides an exception to the banks and financial institutions to act under the UAE’s Financial Crime Compliance requirements for closure of bank accounts.
If the customer’s bank account has regular financial transactions and it is closed without a valid reason, the customer may lodge a written complaint with the concerned bank reporting invalid closure of the bank account.
In the event the concerned bank does not respond to the customer complaint within a reasonable time frame, the customer may approach the Consumer Protection Department of the Central Bank of UAE and file a written complaint with supporting evidence and relevant documents.