Chances of facing a frozen bank account in KSA
Unfortunately frozen bank accounts are very common in Saudi Arabia and just about anyone can be affected. Imagine yourself at the grocery store with a week’s worth of fresh vegetables, snacks and other daily use items all lined up at the checkout counter. You hand over your credit card to the cashier but this time your card is returned and you’re informed that your card has been declined. You then try the ATM but to no avail. A few frantic phone calls later you are informed that your account has been frozen. Your heart begins to sink thinking of the consequences for you and your family.
Nevertheless, despite being a common problem faced by expats, frozen accounts can both be prevented and resolved by understanding why accounts aree frozen and following some basic steps.
Reasons for frozen bank accounts
The most common reasons for frozen bank accounts in KSA are:
1. Failure to provide the bank with a copy of renewed iqama before the expiry date of the previous iqama.
2. Failure to provide the latest salary certificate.
3. Failure to inform the bank about changes in the account holder’s personal information or profession or new employer which requires filling out a form.
4. Suspicious transaction or suspicion of fraudulent activity by the account holder.
5. Not carrying out a single transaction through the account for a six month period.
6. Death of the account holder.
How to prevent freezing of your bank account
So how to prevent your bank account from getting frozen? By following these simple tips you can steer clear of trouble and prevent your bank account from causing you a brain freeze:
1. Make sure that your iqama renewal is already under process several weeks before the expiry date (tarikh al-intiha).
2. Remind your sponsor/HR personnel in your company about your iqama expiry date.
3. Make sure you visit your bank and provide them with the copy of your renewed iqama at least a week before the expiry date on your old iqama.
4. Make sure you provide the bank with your latest salary certificate from time to time.
5. Make sure you inform the bank about any changes in your personal details, profession, employer etc. by filling out the relevant forms. This is particularly important if you intend to exit KSA and return to work under a new sponsor.
6. Always keep some cash handy for situations where you are unable to operate your bank account.
7. Pay all outstanding bills way before your iqama expiry date to avoid incurring extra changes in case your account is frozen.
8. Make sure that you perform at least one transaction from your account in every six month period to keep it active.
How to un-freeze your bank account
Nevertheless, if your account gets frozen, all hope is still not lost. Depending on why your account has been frozen, this is how you can un-freeze your account:
1. If your account is frozen due to expiry of iqama or failure to provide new iqama details, you need to visit your bank along with your new iqama and account details.
2. Once you furnish the bank with proof of identity and a copy of renewed iqama in addition to other documents that might be required such as customer data update form or salary certificate, your account will be restored in some time.
3. If your account is frozen due to other reasons such as suspicious transactions, suspicion of fraud or embezzlement visit your respective bank along with your identification documents and related papers to know the detailed procedure for un freezing your account.
4. If you exited KSA and returned under a new sponsor your old account will likely be frozen. In such a case you need to visit the bank and once you have proved your identity you will be allowed to open a new account and the balance from your old account will be transferred to it. However the bank might deduce some charges from your total balance.
5. If the bank account of a close relative was frozen because of their death, the next of kin can claim the assets after providing necessary legal documentation proving their relationship with the deceased.
Although the exact process and duration may vary from bank to bank following the above mentioned tips will help you prevent and resolve most frozen bank accounts in KSA.
1. What is a frozen account and how does it affect the account holder?
Answer: A frozen account is one which has been temporarily disabled by the bank such that the account holder can not withdraw money, transfer money through net banking or use credit/ debit cards linked to the account.
2. What are the usual reasons for freezing accounts in KSA?
Answer: Mostly accounts are frozen when identity documents/ residence permit (iqama) furnished to the bank initially reach their expiry date and the account holder fails to provide the renewed iqama in time. Other reasons which can lead the bank authority or other government bodies to freeze an account are suspicious transactions or fraudulent activity.
3. What happens to the money that is left in a frozen account?
Answer: The money remains in the account for a stipulated period during which the account holder can process for un-freezing the account and if successful can reclaim the money. If however action is not taken in time the value of money may depreciate due to charges imposed by the bank.
4. How long does it take for a frozen account to be reactivated?
Answer: It depends on the bank and varies from a few hours to a few days.
5. What documents are required to un-freeze an account?
Answer: Generally a copy of the iqama is required to be submitted along with a customer data update form while sometimes banks also require a salary certificate. If the account was frozen due to other reasons additional documents may be required.