Banks have no right to increase fees on credit cards without a prior consent from clients and those who violate such rules could have their licences suspended, the Central Bank said, according to a local newspaper.
The Central Bank sent its most serious warning concerning credit cards in a letter to banks asking them to provide it with proposals on fixed fees and interest rates on credit cards for the coming fiscal year, the Sharjah-based Arabic language daily 'Al Khaleej' reported.
“The Central Bank threatened to impose penalties against all those who violate the rules…these penalties include heavy fines or suspension/cancellation of licence,” the paper said, adding that it had obtained a copy of the letter sent to all financial institutions in the UAE.
It said the Central Bank made clear those rules apply to all financial transactions carried out electronically (credit cards) and do not include other payments such as cash, cheques and inter-bank dealings.
“The Central Bank told banks to present proposals on new fixed fees and interest rates on credit cards for the next fiscal year,” the paper said.
“The letter also stressed that banks must not increase fees on credit cards without a written approval by the Central Bank…credit card issuers are also not authorised to raise existing fees or introduce new fees without a prior consent from the client.”