Abu Dhabi: Sultan Bin Nasser Al Suwaidi, Governor of the UAE Central Bank, issued a notice on Tuesday asking for feedback from all banks and financial institutions regarding proposed mortgage cap regulations.
The notice referred to the previous notice which was issued by the Central Bank in December.
The notice stated that the Central Bank would seek the opinion of all banks and finance institutions on the main components of the regulations before they were issued.
It requested banks and finance companies to provide opinions on the proposed regulations by completing a questionnaire and returning it by January 31.
The questionnaire includes questions to banks and finance companies pertaining to UAE nationals and expatriates, as follows:
1. What should be the maximum LTV?
2. What should be the appropriate maximum financing amount?
3. What should be the accepted sources of repayment?
4. What should be the maximum repayment period?
5. What should be the accepted collateral provided?
6. How should retired borrowers be treated?
The proposed regulations will include other components, including:
1. Customer protection: Transparency in the setting and publishing of all fees and interest rates including the calculation of interest/profit rate (fixed/floating based on EIBOR), without impediments or usury penalty to the transfer of the loan between institutions or to early repayment of the loan.
2. Housing Programmes: Banks and finance companies may give to loans of "Housing Programmes" special treatment against incentives provided for such loans by official housing programmes in the UAE.
