UAE Banks Prepare New Loan Transfer Regulations for January 2027

The UAE banking sector is preparing to introduce new regulations governing the transfer of outstanding customer loans between banks, with an expected implementation date of January 1, 2027, Gulf News reported citing a banking source quoted by Arabic daily Emarat Al Youm.

Under the proposed measures, borrowers would be required to remain with their initial lending institution for a specified period and pay a minimum number of instalments before becoming eligible to shift debt to a competing bank. The initiative aims to curb frequent bank switching driven by aggressive promotional refinancing offers and bring greater stability to lending portfolios.

The unnamed source stated that the framework is intended to curb repeated early loan closures and refinancing cycles, reducing the administrative burden and associated financing costs while assisting banks in risk management and loan portfolio planning. The incoming rules will also define whether constraints apply exclusively to personal loans or extend to other financial liabilities, alongside clarifying potential exemptions and calculation methods for mandatory waiting periods.

The regulatory discussions emerge amid heightened competition among UAE lenders, with banks offering promotional repayment holidays of seven to 12 months for UAE nationals and six to nine months for expatriates to attract transferred liabilities. The source noted that all proposed parameters, including minimum instalment thresholds and the rollout timeline, remain subject to formal announcement by regulatory authorities.