As a group of financial professionals operating in the financial services sector, I take this moment to explain disclosure as in what it means, why it’s important, clients and how they relate to disclosure, effects of non-disclosure among other issues surrounding this issue,before during and after applying for a personal loan in Dubai/UAE.
Financial services sector The financial services sector in Dubai serves people from all walks of life(Indians,Pakistani,etc) and like any other financial sector made up of banks, insurance companies, investment house etc., there are rules and regulations which govern them and in Dubai these set of rules are stipulated by the Central bank of UAE.
Furthermore, banks in Dubai provide the same scope of products for example, personal loan, auto loan, credit card, debit cards, insurance policies etc. but each and every bank has its own internal policy it uses to govern its particular set of products.
So you find that the requirements for instance of RAK Bank are similar to that of mashreq but each and every bank then has its own requirements as per their own policy. Each and every client in need a loan or credit card of banks in Dubai/UAE,the client should meet their requirements and for the banks to realize that they meet these particular requirements, the client has to fully disclose all their income and their liabilities.Banks then use emi calculators to calculate loans to be disbursed based on the financial soundness of the client
The most Basic meaning of DisclosureThe act of releasing all relevant information requested by the personal loan officer, loans officer, personal loan executive, loans executive, credit analyst, company that may influence the approval or denial of a loan in Dubai, credit card, auto loan or any other financial instrument. Disclosure is basically of two types notably voluntary disclosure and involuntary disclosure.
Involuntary disclosure basically is the disclosure provided by the documents you present, for instance the passport copy, visa copy, emirates ID copy, 3 months bank statement, salary certificate, payslips, credit card copies and credit card statements. Voluntary disclosure is when one intentionally and willingly discloses their obligations or other incomes or commitments for example, board membership fees, dividends received, capitals gains on stocks ,extra credit card payments etc.
WHY IS DISCLOSURE IMPORTANTDisclosure is both important to the client and the bank or financial institution in that to the client, it helps the bank understand the financial position of the client, and provides the best option of product to meet the customer’s needs/expectation. In reality, it is very hard to meet the expectation of a client on a 100% basis but at least the bank takes an extra mile within its policy to satisfy the particular client.
The also benefits through the correct calculation of his debt burden ratio, his financial capabilities to re-service the loan if issued etc. In most cases , non-disclosure may lead to over disbursement of a loan or credit card limit, and with the passage of time, the client will find it hard to honor their financial obligation and thus suffer as a result of the financial strain that befalls them. It is always advised to bite what you are able to chew.
To the bank, disclosure helps them to fully assess the financial position of a client and thereby be aware of the client’s ability to pay back or to honor the loan obligation consistently and persistently. This definitely helps the bank to manage its risk and to build an asset book that performs. This disclosure helps personal loan officer, loans officer, personal loan executive, loans executive, credit analyst to protect the bank’s liquid assets (cash) from potential fraudsters and dubious clients.
CLIENTS AND HOW THEY RELATE TO DISCLOSUREThere are many different forms of clients in the UAE ,and each and every client has their own objective they wish to achieve, as they go on their business on a day to day basis.60% of clients honestly and willing fully disclose their position to loan officers,20% always partially disclose and attempt to measure the level of intelligence of the loan officer and the credit department,10% openly share their problem or hindering issue, but attempt to connive with the loan officer through giving gifts, money etc in order to get their cases approved and the last batch of 10% intentionally hide data, and misrepresent or produce false documents in order to get their transactions approved.
EFFECTS OF NON DISCLOSUREThese basically include immediate decline of applications, blacklisting of the dubious clients, police cases, dismissals from employment, financial losses, a bad loan book among others. As a bank officer ,one has to be very alert when conducting business with clients, and note any contradicting information from the verbal or written speech coming from the client.it is also key that the loans officer, reports any form of irregularities on any application or inform their superiors.
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