UAE Central Bank directs banks to refund excess charges
Dubai: The Central Bank of UAE has directed all banks operating in the UAE to reduce the early settlement charges on home loans through a circular.
The central bank directive asks banks to limit the early settlement charges to 1 per cent of the outstanding balance or Dh10000, whichever is less.
The Board of Directors of the Central Bank has issued Decision No. 96/By Circulation/2019 amending Appendix 2 of Regulation No. 29/2011 regarding Bank Loans & Other Services Offered to Individual Customers.
The amendment states that the early settlement or partial settlement fee applying to home loans has been reverted to maximum 1 per cent of the outstanding balance or AED 10000 whichever is less.
“Banks and finance companies that arbitrarily changed the stated terms of the fees in existing customer agreements, thus violated item 7 of the amendments of Regulation No.29/2011 attached to Notice No. 157/2018 are required to respect the original terms of the agreements and refund all overcharges for all customers based on their original fee within 30 days of this notice,” the central bank circular to banks said.