Rates on personal loans offered by the UAE banks are set to reduce, following the release of a new mortgage credit law, Central Bank governor Sultan bin Nassir Al Suwaidi has said.
According to the new law, the mortgage credit limit is set at a maximum of 20% of the total bank deposits, which is internationally accepted.
The new mortgage credit law also allows 23 national banks and 28 foreign banks to provide loan of up to 80% of the property value to Emiratis and 75% to expatriates.
Suwaidi was quoted by Emarat Al Youm daily as saying that the law, which set ceilings on mortgage credit to Emiratis and expatriates in the second largest Arab economy, will be enforced a month after it is published in the official gazette.
"The Central Bank has already issued regulations for personals loans involving a list of fees and commissions.
"After the issuance of the mortgage credit law, the interest rates on personal loans are expected to gradually decline," Suwaidi added.