The UAE Central Bank (CBUAE) on Tuesday, June 19, has set new maximum limits or ‘fee caps’ for fees or commissions charged on retail customer service.
The bank announced that the new fee caps apply on banking services such as home loans and late fees for credit cards, reported WAM.
The move was done as a way to supervise the banking sector by adopting consumer protection principles including competition inhibiting, usury, notary function, and strategic related principles.
The bank added that banks will also be closely monitored particularly on fee cap calculation and if possible, ask the banks to charge lower fees than those prescribed in the caps.
CBUAR has also instructed banks and finance companies to display the new fee caps on their websites.
Fees charged by the banks will now be reviewed annually to ensure that consumers are appropriately protected.
The Amendment also states that banks will need to notify and seek approval from CBUAE (ex-ante) of any planned introduction of a new fee or a change of fees larger than five percent. Banks will have to notify and seek approval by CBUAE for these additions or changes during the first five days of April or October each year.
Fee caps are used 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.
Consumers are urged to notify the Central Bank should there be banks that do not comply with the new cap fees.
