Bahrain Air staff with outstanding loans have had their bank accounts frozen until they pay off their debts, the airline's trade union claimed yesterday.

It added that more than 200 expat employees were also unable to leave the country because of visa issues, according to a report published in our sister newspaper the Gulf Daily News (GDN).

The GDN reported last week that Credimax had suspended accounts of all Bahrain Air employees after the airline went into voluntary liquidation on February 12 with debts of BD17 million ($44.8 million).

However, Bahrain Air Trade Union (Batu) chairman Abdull Raoof revealed yesterday that staff were also unable to access their personal bank accounts if they had outstanding loans - although a top lawyer told the GDN this was illegal without a court order.

Raoof said former Bahrain Air staff now had no access to cash, particularly since the carrier was in liquidation and issues such as staff compensation had yet to be resolved.

The union is due to meet officials representing the liquidator, Mourad Consultancy, today and will urge them to intervene with the banks on employees' behalf.

Raoof said that 201 of the airline's 345 former workers were expats who were now unable to leave the country.

"We are all in the airline industry and have to look for new jobs but there are a few expat workers who wanted to travel to Dubai or Qatar for interviews, but couldn't because there is a travel hold on them owing to visa issues," said Raoof.

"Apparently those people under the visa of Bahrain Air have no valid visas, even though the Commercial Registration of the company still exists.”


A senior banking industry official told the GDN that banks were technically not entitled to suspend customers' personal accounts, while admitting that many did so to protect themselves from any losses.

"As a bank we cannot block credit cards without giving a 15-day notice, according to Bahrain law," said the senior banker on condition of anonymity.

"With regard to current and savings accounts, technically a bank cannot hold those accounts. We do not have that right, but that doesn't mean it doesn't happen. When it comes to a situation of an overnight liquidation, it affects the banks as well - which leaves the bank with no recourse.

"So it is technically a standard practice, but not legally standard practice and is done to protect the bank. Banks do resort to these practices, but shouldn't. It is important to understand that in order to safeguard the interest of the bank, measures have to be taken as most of the customers will skip payment - especially the expatriates,” the banker added. – TradeArabia News Service