Borrowing from banks is common for individuals and businesses in the UAE, whether it’s for personal loans, mortgages, or business financing. While banks enjoy strong legal protections, borrowers also have rights under UAE banking laws that safeguard them from unfair practices. Understanding these rights helps borrowers make informed decisions, avoid disputes, and protect their financial stability.
Key Rights of Borrowers in the UAE
1. Right to Full Disclosure
Banks are required to provide borrowers with clear and transparent information about loan terms, interest rates, repayment schedules, and penalties before signing an agreement. Hidden charges or misleading terms are prohibited.
2. Right to Fair Treatment
Borrowers must be treated fairly, without discrimination, and in compliance with the Central Bank of the UAE’s regulations. Aggressive collection methods are not permitted.
3. Right to Privacy
Customer data is protected under UAE laws. Banks cannot disclose borrower information without consent, except in cases mandated by law.
4. Right to Early Settlement
Borrowers can repay loans early by paying the outstanding balance plus a minimal early settlement fee, as set by banking regulations.
5. Right to Dispute Resolution
If a borrower believes they are being unfairly treated, they can file a complaint with the bank and escalate it to the Central Bank of the UAE if unresolved.
6. Right Against Unlawful Penalties
Banks cannot impose excessive penalties for late payments beyond the limits set by law.
When Borrower Rights Are Violated
Despite regulations, disputes often arise over hidden charges, unfair interest hikes, or bounced cheque cases linked to loans. In such situations, borrowers may face travel bans, asset freezes, or even criminal complaints. Having a strong banking litigation lawyer becomes essential to protect rights and resolve disputes legally.
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How Adv. Sanafer Arakkal of Concept Advocates Helps Borrowers
Adv. Sanafer Arakkal, founder of Concept Advocates, is an experienced lawyer specializing in banking and financial litigation in the UAE. He helps borrowers understand their rights and provides legal support in disputes with banks.
His services include:
- Loan Agreement Review – Ensuring loan contracts are fair and compliant with UAE banking laws.
- Dispute Resolution – Negotiating with banks to restructure debts or reduce penalties.
- Cheque Bounce Defense – Representing borrowers in criminal and civil cases related to post-dated cheques.
- Court Representation – Handling cases of wrongful penalties, unlawful recovery actions, or loan default disputes.
- Strategic Advisory – Guiding borrowers on preventive measures to avoid legal consequences.
Conclusion
Borrowers in the UAE enjoy legal protections that ensure fairness and transparency in banking transactions. However, disputes with banks can still arise, and without expert legal guidance, borrowers risk severe financial and legal consequences.
With Adv. Sanafer Arakkal and Concept Advocates, borrowers gain not only legal defense but also practical solutions to safeguard their rights and achieve financial stability with confidence.
