UAE legal: How do I restructure a loan after my salary gets reduced?

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Dubai - Here are your rights in this situation

By Ashish Mehta

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Published: Sun 24 Oct 2021, 11:43 AM

Question: I have a credit card with an outstanding amount of Dh 35,000. Due to salary restructuring at my current workplace, my salary got reduced by 30 per cent. I could not continue the payment over the last four months. How can I work with the bank to restructure my repayment? Also, I’ve been receiving many harassing calls from the bank. What are my rights?

Response: Pursuant to your queries, as you are eager to restructure your outstanding credit card payment with your bank and know your rights related to harassing telephonic calls by your bank for non-payment of outstanding credit card payment, the provisions of Circular No. 8 of 2020 of the Central Bank of UAE pertaining to Consumer Protection Regulation (the ‘Consumer Protection Regulations for UAE Banking Customers’) are applicable.

In the UAE, if a customer defaults in payment of outstanding credit card amounts or personal loans, he or she may request the bank or financial institution to restructure his or her personal loan or credit card outstanding payment. If the bank or financial institution agrees to restructure the personal loan/outstanding credit card payments of its customer, the bank or a financial institution may within ten days from the date of agreeing with the customer to restructure the loan or outstanding credit card amount provid a revised repayment plan. This is in accordance with Article and of the Consumer Protection Regulations for UAE Banking Customers, which states, “ Where Licensed Financial Institutions to reach an agreement on a revised repayment/payment arrangement with a Consumer, the Licensed Financial Institution must, within 10 complete business days, provide the Consumer in writing, with clear disclosure and explanation of the revised repayment/payment arrangement. The Licensed Financial Institution will provide the Consumer with a copy of the detailed and revised payment schedule, and a breakdown of how payments will be allocated to interest/profit and the outstanding balance owing. The Licensed Financial Institution must disclose to the Consumer that reporting relating to the Consumer’s Arrears must be shared with the Credit Information Agency. Where Arrears arise on an account and a Consumer makes an offer of a revised repayment/payment arrangement that is rejected by the Licensed Financial Institution, the Licensed Financial Institution must internally document its reasons for rejecting the offer and communicate to the Consumer in Writing why the matter was rejected.”

Further, your bank may not harass you while it follows up with you for repayment of outstanding credit card payments. The bank may not call its customers excessively and during unreasonable hours for the collection of outstanding credit cards or loan amounts. This is in accordance with Article (c) of the Consumer Protection Regulations for UAE Banking Customers, which states, “In its attempts to contact a Consumer by telephone, a Licensed Financial Institution must not make an unreasonable and excessive number of communication attempts /actual communications with the Consumer. Such attempts / actual contact must only be made during the hours of 9 AM to 8 PM. Where the Consumer has not been reached, a message should be left by the Licensed Financial Institution and/or authorized debt collection agent, so that the Consumer will have the ability to Call-back the same number used by the Licensed Financial Institution and/or authorized debt collection agent.”

Based on the aforementioned provisions of law if you feel that the bank harasses you by calling you frequently over the phone and during unreasonable hours, then you may file a written complaint with the bank from where you availed the credit card facility in accordance with the procedures laid down in Article 8 of the Consumer Protection Regulations for the UAE Banking Customers which states about complaint management and complaint resolution. In the event, the bank continues to harass, you may approach the Consumer Protection Department of the Central Bank of UAE and file a written complaint against the bank.

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: Readers may e-mail their questions to: or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.

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