The Central Bank of the United Arab Emirates has decided to amend the terms governing personal loans and finance transfer from one bank or finance company to another, obligating banks and finance firms to reduce the interest rate and not to increase payment period of retail loans, which will be provided after the issuance of the new amendments.
The amendment, which include other services provided to individuals, came after a decision issued by CBUAE's board of directors, and was published in the official gazette.
As per Federal Law No 10 of 1980 regarding the CBUAE, the monetary system and regulation of the banking profession, the CBUAE's board has decided to replace paragraph (B) of article 20 concerning personal loans as follows: ''Any borrower is entitled to transfer his/her personal loan/financing from any bank or a finance company operating in the country in return for an early repayment commission not exceeding 1 percent of the remaining amount of the loan, or AED10,000 whichever is less.'' Regarding loans 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.
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