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The UAE banking sector is finalising new controls on debt transfers between institutions that will apply from January 1 2027, a banking source told Emarat Al Youm. Under the anticipated framework borrowers must remain with the original financing bank for a defined period and complete a specified number of instalments before they can move their debt elsewhere. The source said the measures aim to reduce frequent switching prompted by promotional offers while promoting greater stability in financing relationships. These forthcoming rules will consider variations in loan types borrower profiles and potential exemptions with clear mechanisms for calculating the waiting period and required payments.
A banking source who declined to be named indicated that the regulations would establish a clearer timeline for borrower commitments to the initial lender before transfer applications can proceed. Such steps would limit transfers executed shortly after loan origination the source added. Official confirmation of exact waiting durations instalment thresholds and implementation mechanics will come in formal instructions from the Central Bank of the UAE according to the reporting on October 26 2026.
Current Central Bank of the UAE regulations under Regulation 29 of 2011 already permit borrowers to transfer loans to another bank or finance company subject to an early settlement fee capped at 1 percent of the outstanding balance or 10 000 dirhams whichever is lower. Legal assessments published by UAE Expert Hub note that the receiving institution must adhere fully to retail lending standards on debt burden ratios loan tenors and repayment percentages. For loans originated before the regulation the transfer must deliver a lower interest rate without extending the term or increasing the principal balance.
Several UAE banks ran active debt transfer campaigns earlier in 2026 that featured interest rates starting at 2.8 percent welcome bonuses of 5 000 dirhams and instalment deferrals of up to six months according to reports carried by Ours Abroad News. Those promotions targeted individual customers including frontline workers and focused on purchasing existing debt from competitors. Industry participants observed that such offers contributed to heightened customer mobility which the forthcoming controls now seek to moderate.
The Central Bank of the UAE has maintained a broader consumer protection framework through Circular 8 of 2020 that obliges lenders to provide credit counselling and fairly evaluate restructuring requests when borrowers face repayment difficulties. Khaleej Times reporting from April 2026 highlighted that institutions must respond to such approaches with reasonable consideration of rescheduling or other alternatives. Any agreed revised terms must be documented in writing within 10 business days under the same standards.
UAE Banks Federation which represents 49 lenders has previously coordinated sector-wide initiatives including temporary standstills for stressed small and medium-sized enterprises that account for around 60 percent of national gross domestic product according to Asian Legal Business coverage from October 2026. While the new debt transfer rules focus on retail and personal financing they form part of ongoing efforts to balance competition with portfolio stability. Final details of the January 2027 controls remain pending formal regulatory publication.
