Loan against end-of-service benefits

Dubai's Emirates NBD today announced a new loan scheme for its salaried customers - they can now avail of personal loans against the End of Service Benefit (EOSB) amount owed to them.

The bank would treat the EOSB as collateral for the loan amount, it said in a statement, while offering up to 90 per cent of the EOSB in loan.

Under Article 132 of the UAE's Labour Law, an employee becomes eligible for an end-of-service gratuity once he or she has completed at least one year of continuous employment. In that case, the employer must pay the equivalent of 21 days' wages (basic salary) for each of the first five years of employment, and 30 days' wages for each additional year, provided that the total amount is no more than two years' wages.

According to the bank's statement, the personal loan against EOSB is available to all of the bank's customers who have a salaried account with the bank, while certain conditions apply. For one, applicants must earn at least Dh5,000 per month to be eligible for this facility, with the bank offering personal loans for up to 90 per cent of the EOSB amount.

"The program allows customers in the medium and lower salary range, to avail personal loans to meet their financial requirements, by considering the EOSB amount as collateral against which the customer can take a loan. It also therefore assists customers to manage their debt wisely because loan amounts cannot exceed the total benefit amount due to the customer," said Shekhar Krishnamurthy, Head of Retail Assets and Liabilities, Emirates NBD.

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