The UAE Central Bank announced that it has published an amendment to ‘Annexure 2’ of the Regulations.
The UAE Central Bank (CBUAE) announced on the 18th of June 2018 that it has published an amendment to ‘Annexure 2’ of the Regulations Regarding Bank Loans & Services Offered to Individual Customers (2011).
Fee caps are used to protect the consumers from the anti-competitive and unfair practice, all the banks will be able to amend their price only based on an increase in costs.
CBUAE provided instructions to the banks and all the companies in the financial services to display the new fee caps on their websites.
To ensure the protection of consumers the bank fees will be reviewed annually, the banks will need to notice and seek approval from CBUAE (prior) any introduction of new fee or a change in the current fees larger than 5%. Banks must notify and request CBUAE approval for these additions or changes during the first five days of April or October of each year.
This decision has been issued as an amendment to the circular issues on 28 December 2017 by the CBUAE which imposed that the banks and finance companies must absorb the applicable VAT until further instructions from the Central Bank. Similarly, any applicable VAT on the services provided by the Central Bank was to be absorbed by the Central Bank.
CBUAE has amended the above mentioned circular with this annexure which outlines the fee caps and effectually makes the fee caps exclusive of VAT, then enabling banks to change the VAT amount in addition to any prescribed capped amounts.
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