The UAE Central Bank (CBUAE) has announced an amendment to regulate the maximum limits or “fee caps” charged on banking services such as home loans and late fees for credit cards.
The amendment comes as the CBUAE undertakes more active supervision of the banking sector with the adoption of consumer protection principles, a statement said.
It said fee caps are being used as a tool to protect consumers from anti-competitive and unfair practices. This includes ensuring that entities do not automatically default to using the maximum caps when the actual costs are lower and banks will have to justify their increased costs in order to increase fees.
If consumers notice incidents of non-compliance they are urged to notify the Central Bank immediately.
Of the 43 fee caps affected, 24 fee types are common with the old fee caps but are either at the same level or lower and 19 are new fee types such as those that relate to home loans and credit cards.
CBUAE also instructed banks and finance companies to display the new fee caps on their websites.
Going forward fees charged by the banks will be reviewed annually to ensure that consumers are appropriately protected, CBUAE added in the statement.
The amendment also states that banks will need to notify and seek approval from CBUAE of any planned introduction of a new fee or a change of fees larger than 5 percent.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.