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The UAE Central Bank Has Introduced New Bank Fee Caps

UAE banking

The UAE Central Bank has imposed new limits on a number of fees and commissions charged by retail banks.

UPDATE: Click here to see what the UAE bank fee caps actually are

The UAE Central Bank (CBUAE) has imposed new limits on a number of fees and commissions charged by retail banks.

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According to a statement issued by CBUAE, the institution is taking a more active role in the supervision of the retail sector to prevent anti-competitive behaviour.

In addition to keeping a closer eye on fees, banks have been warned that they must have “the appropriate product approval processes in place for all products, which include an examination of the basis and appropriateness of the fee calculation”. The bank says it may even impose lower fees than those prescribed in the caps.

“Fee caps are being used as a tool to protect consumers from anti-competitive and unfair practices,” the CBUAE statement says.

“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.”

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Consumers are urged to notify the CBUAE if they think bank charges are unreasonable.

CBUAE said it carried out comprehensive studies before imposing the new caps. It benchmarked 140 fee types and applied fee caps on 43 services, including 19 related to home loans and credit cards.

Fees charged by UAE banks will now be reviewed annually and banks will have to obtain approval for new fees and any change of fee larger than 5%.

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