The UAE Central Bank has issued new terms and conditions on the transfer of retail loans from one bank to another.
The new amendment mandated banks and finance companies to reduce the interest rate without increasing the repayment period.
UAE-based banks or finance companies are also obliged to accept the transfer of the personal loan.
“Any borrower is entitled to transfer his personal loan/financing from any bank or a finance company operating in the country in return for an early repayment commission not exceeding 1 percent of the remaining amount of the loan, or Dh10,000 whichever is less,” the Central Bank said in a statement.
The Central Bank also reminded the banks and finance companies to reduce the interest rate and not to increase the repayment period of those who were granted with loans before the new rule was issued.