Call to cap UAE interest rates

UAE Central Bank held in Abu Dhabi on Sunday a consultative meeting with a delegation of Abu Dhabi Chamber of Commerce and Industry (ADCCI), Abu Dhabi Council for Economic Development and representatives from private sector. The meeting discussed the current situation of national economy and coordination among competent authorities in this respect.

The meeting was attended by Khalil Mohammed Sherif Fowlazi, Chairman of the UAE Central Bank and Sultan bin Nasser Al Suwaidi, Governor.

Representatives of the private sector explained the economic and financial difficulties they face, citing the interest rate of 9-10 per cent imposed by the banks, being the highest in the GCC countries. They reiterated such a situation exposes traders and economy in general to danger.

The representatives continued that the difficulties ensued from imposition of the high fees ranging from 1.5-3 per cent during the loans restructuring. They referred to the change of loan agreement regulations and interest rates on loans by banks without consent of borrowers, calling on the Central Bank to set interest rate ceiling on the loans.

The representatives called on government to establish a fund to refinance mortgage loans of individual citizens and companies to alleviate the burden on borrowers as this will significantly help the national economy.

For its part, the Central Bank stressed the international standards that are not restricted by conditions between the banks and borrowers, indicating that the loans offered by the banks were hostage to the level of liquidity and interest rates on deposits they have.

After a lengthy meeting they all agreed to present the issue to the board of the Central Bank to take the appropriate decision.

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