The Central Bank of the United Arab Emirates
(UAE) has tightened banking rules to curb banks’ lending activities
and cut down on the fees that banks charge for personal and auto
loans.
The new legislation applies to all banks
operating in the UAE.
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The new legislations include:
- Loans
issued will be capped at 20 times the monthly salary of a borrower
and are to be repaid over 48 months; - Penalty interest fees for late
repayments will be restricted to two percent, with the minimum
charge being AED50 ($13) and the maximum penalty amount for delayed
payments being AED200; - Universal fees of AED10 for each
ATM transaction that each bank will have to charge. Previously,
some banks offered the service free of charge, while charged a
fee.
Before the regulations, each bank
set the amount of charges and their policies individually.
According to Middle Eastern
media, the new regulations aim to improve competition among the
retail banks in the kingdom and provide consumers with more
transparency when comparing banks.
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