All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
It is permissible for the creditor to stipulate that the debtor pays all installments in the event of the latter`s failure to make payments on time since there is no evidence from Sharia prohibiting such condition particularly if the debtor agreed to it. The evidence on this is that Kathir bin 'Amr bin 'Awf Al-Muzani narrated from his father, from his grandfather, that the Messenger of Allah (PBUH) said: "Reconciliation is allowed among the Muslims, except for reconciliation that makes the lawful unlawful, or the unlawful lawful. And the Muslims will be held to their conditions, except the conditions that make the lawful unlawful, or the unlawful lawful." {Related by Tirmithi,1352}.
Moreover, it was stated in the Hanafie book [Kholasat al-Fatwa]: "Even if the creditor said: "Whenever an installment is due and the debtor fails to pay, the remaining installments become due as well." {Al-Buhir Al-Raa`iq, vol.6/pp.133}.
Resolution No. 51(6/2) of the International Islamic Fiqh Academy states: "It is permissible for the one who sells in installments to stipulate that the debtor makes payments before their deadline in case the latter failed to pay some on due time. This is true in case the debtor had agreed to this upon conclusion of the contract." This same ruling is reiterated by Resolutions (64) and (133).
In conclusion, it is permissible for the bank to stipulate paying off all installments in some situations. Thus, if the debtor who had approved of this condition failed to make payments on time, it is the right of the bank to demand him to pay off all the debt payments on the spot. And Allah the Almighty Knows Best