■ The UAE Central Bank amended the rules related to personal loans and other services provided to individuals.
■ New terms and conditions were laid down for the transfer of personal loans or personal finance from one bank or a finance company to another.
■ Banks and finance companies are obliged to reduce the interest rate, not increase the period of loans and other facilities for retail loans.
■ New rules cover retail banking services given to individual customers.
Abu Dhabi: The UAE Central Bank has amended retail-banking rules related to personal loan and other services provided to individuals, it was announced on Tuesday.
The Central Bank has set new terms and conditions for the transfer of personal loans or personal finance from one bank or a finance company to another.
After the issuance of the new amendment, banks and finance companies are obligated to reduce the interest rate, not increasing the period of loans and other facilities for retail loans given to individual customers.
The move came after a decision issued by the bank’s board and was published in the official Gazette.
As per Federal Law No 10 of 1980 concerning the Central Bank, the monetary system and regulation of the banking profession, and after having reviewed its rules thereof and regulation No. 29 of 2011, the bank’s board has decided to replace paragraph (B) of Article 20 concerning personal loans as follows:
"Any borrower is entitled to transfer his personal loan/financing from any bank or a finance company operating in the country in return for an early repayment commission not exceeding 1 per cent of the remaining amount of the loan, or Dh10,000 whichever is less."
Other UAE-based banks or finance companies are entitled to accepting the transfer of the personal loan under certain conditions — including their full commitment to the new rules, especially those related to the loan amount, duration of repayment and monthly instalments.
Regarding loans that were granted before the issuance of the new rule, banks and finance companies should reduce the interest rate and not to increase the repayment period, or giving additional loan or finance to the borrower.