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29 March 2024

Dubai Bank refunds 'overpaid' service fees to Skycourts clients

Published
By Parag Deulgaonkar

In a move that could set a precedent, an Islamic bank in the UAE has refunded "overpaid" service fees to its customers.

Dubai Bank, in a letter sent to unit owners financed by them in Skycourts, Dubailand, said they were refunding part of the service fee paid by customers in line with Shariah principles.

"After a detailed review of the service fees paid against the financed unit with Dubai Bank, and in line with our Shariah resolution, the management of the bank has decided to extend an additional benefit to Skycourts customers."

The fee refunded is for the period when the bank took the possession of the unit from the developer till the date of notice of delivery was sent to the customer by the bank.

Although it is not clear, but informed sources say nearly 600 apartments have been financed by Dubai Bank. Skycourts apartment owners, financed by the bank, have welcomed the move.

RK, who owns a two-bed apartment, was refunded  close to Dh6,000 for a seven-month period, starting April to October.

"I am happy with what I have got. I never had expected a refund on service charges by my bank. Thanks, but I would have preferred had they refunded the amount till the day I took the possession of my apartment and  not to the date of the handover notice."

RK took possession of his apartment in December.

Customers of other Islamic banks/institutions are hoping they too will be offered a similar refund.

SW, who took a loan from another Islamic institution, says he hasn't heard from his bank on refund.

"Last time, my home finance company took action only after Dubai Bank waived the advanced rental payments for their customers. I hope they will reciprocate this time as well."

Dubai Bank, in March 2011, had announced it would waive or fully refund advanced rental charges for the period beyond the "expected date of delivery" of Skycourts project.

In a letter emailed to its customers, the Shariah-complaint bank said:

"In those specific situations where the delivery of the property under construction has been delayed beyond the 'expected date of delivery' [i.e. the completion date plus the contractually defined extension period], advanced rental charges for the period following the 'expected date of delivery' will be waived and/or fully refunded for all eligible customers."

The Dh1.6-billion Skycourts project in Dubailand, developed by National Bonds Corporation, has over 2,800 apartments across six towers.