Feb 28 2011
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Qatar banks sue loan defaulters in Gulf countries
These are mostly expatriate defaulters who took loans and fled the country without servicing them and are now based in other Gulf Cooperation Council (GCC) states.
"A beginning has been made by some banks to initiate loan recovery procedures against defaulters who are now based in other GCC states," a lawyer said.
Defaulters in other countries--including South Asia and Europe--might also face the music soon as the banks are determined to go all out on their trail, said the lawyer.
A lawyer for a major commercial bank, meanwhile, confirmed that banks were indeed gearing up to take their legal battles for loan recovery overseas.
"If the loan amount is less, a bank is willing to waive it off but there are people who have taken huge loans and fled," said the lawyer asking not to be named.
The recovery offices of the banks with huge defaults are filing lawsuits in the Qatari courts to obtain verdicts against the fleeing defaulters in absentia.
It is only after such verdicts that a bank can file a recovery lawsuit overseas.
"There are large numbers of court cases against both, the defaulters who have left the country for good and those who are still here and they include nationals as well," said Al Zaman.
"One can have an idea about the piling up litigations from the number of notices some banks are inserting in the local newspapers," he said.
A notice is put up by a bank in a newspaper as a last resort and only against those defaulters who have fled without servicing their loans, left no assets behind to be liquidated to partly or fully settle the loan or without leaving behind any guarantors.
Al Zaman said the banks are largely to blame for the massive defaults as they gave away huge loans without collateral, the only guarantee being salary transfers.
"The banks should actually insist that for all personal loans there must be a local (Qatari) guarantor so he can be caught in the event of default," he said.
© The Peninsula 2011
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