Retirees demand an increase in bank financing…and raising the monthly deduction above 30%

Retirees demanded an increase in the bank financing allocated to them, allowing them to buy a car or borrow for emergency cases, stressing that banks refuse to grant them any exceptions even if the retiree has no bank obligations at all, and receives a fixed or large pension, and there is no possibility of that salary decreasing in the future.

They confirmed in comments, via Emirates Today platforms, on topics published in the field of financial inclusion, that some retirement salaries are large, and allow the deduction rate to be increased to 30% of the salary currently in effect, pointing out that the car loan is, essentially, guaranteed by mortgaging it to the bank, in addition to that the value of the installment is mostly reasonable.

They said: “We, as retirees, cannot manage our financial affairs easily, as a result of the inability to borrow with a monthly installment that exceeds 30% of the retirement salary, while other employees can easily manage their financial and living affairs, as a result of borrowing by deducting up to 50% of the salary.”

Commenting, banking expert Ahmed Youssef said: “If a citizen employee borrows while he is at work, and his salary decreases after retirement, the banks take this into account in accordance with the instructions of the Central Bank, and reduce the deduction rate from 50% to 30%, taking into account the imposed repayment period. In doing so, they adhere to the laws and regulations, all of which are in the interest of not burdening the retiree with large burdens.”

He added: “Sometimes banks reduce the interest rate charged on financing for the retiree so that he can pay 30% of his salary, as a monthly deduction, with a specific repayment period, and this is also in the client’s interest.”

Youssef continued: “If the retiree does not have any obligations to banks, he can finance a car or obtain a loan comfortably without problems, taking into account the specified deduction percentage.”

For his part, a banking official, who preferred to remain anonymous, said, “Banks implement the Central Bank’s instructions, but alternatives can be proposed or cases studied in which, for example, a retiree takes a high salary that allows him to deduct 50% of it, while remaining with a monthly amount appropriate to his needs. Or retirees who do not have bank obligations can also be allowed to obtain financing by deducting 50% from the salary as a monthly installment as well, as long as his salary remains fixed and will not decrease in the future, as happens with an employee who He borrows and after a period of time retires, and thus his salary decreases.”

He added: “Banks are ready to implement any new decisions or instructions regarding retirees, but the matter requires a detailed study, and the establishment of controls and mechanisms as a guideline for all banks to operate according to so that the matter is not left to the discretion of each bank individually.”

. Retired: Banks refuse any exceptions, even in the absence of bank obligations, or receiving a fixed or large salary.