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Article (11) Interest Rates, Commissions and Banking Service Charges

C 29/2011 Effective from 29/3/2011

a) Each bank or finance company shall determine the interest rates pertaining to personal loans and car loans (must include insurance and expressed in one figure) along with overdraft balances and unpaid credit cards balances and include them in the table shown in Annex-1 of these Regulations. Copy of this table must be sent for publication by the Central Bank.

b) Fees, commissions, deductions and charges on loans, overdraft balances and unpaid credit card balances and those charged on retail banking services, shall be in accordance with the limits prescribed in the table shown in Annex-2 of these Regulations. Banks and finance companies may not impose any commissions, fees, charges or fines other than those mentioned in the said table without Central Bank's written approval.

c) Any Fees/commissions on purchase/sale of currency notes, Travelers Cheques, Demand Drafts, and Telegraphic Transfers for major countries must also be clearly written in Arabic and English on a board of an appropriate size to be fixed next to the Foreign Exchange Counter in the banking hall at banks’ branches, as shown in Annex-3 of these Regulations.

d) The Central Bank shall annually review fees, commissions and charges imposed as per table No-(2) attached to these regulations.

Clarifications and Guidelines (Notice No. 2901/2011)
  1. Relevant fees, charges and commissions applicable to personal customers have been specified in the Appendices to the Circular. Banks are not allowed to levy any other commissions, fees, charges or fines without Central Bank’s written approval. Banks are however free to reduce or exempt their customers from payment of certain fees and charges at their discretion.
  2. Loans and insurance are separate products. Hence it should be a customer’s choice to select either to pay them together over the period of loan or to pay upfront. Banks should however explain to the customer properly and obtain his concurrence before charging him for the insurance.
  3. List of charges and commissions apply to personal loans, car loans and personal overdrafts. Banks may continue to levy charges and commissions on credit cards as hitherto as no change has been proposed in the regulations.
  4. If there are other important fees and charges applicable to certain segment of customers but left out in the Appendices, these may be submitted for consideration of the Central Bank.