The UAE Banks Federation, led by the Mashreqbank chief executive Abdul Aziz Al Ghurair, yesterday outlined a code of ethics for lenders with a focus on consumer protection as home, car and personal loans become more popular.
“We want to protect the consumer, we want to protect the economy,” Mr Al Ghurair said.
“It’s the right time because we are in a boom time and many customers don’t get into the details. And they are prepared to sign the documents quickly [in a rush] to buy the car or mortgage or whatever. We want to make sure the customer takes some time to read these documents, have the bank answer all his questions before he signs.”
The federation’s code of conduct, distributed to reporters at a conference in Dubai, also includes customer service, relationships between banks, and management. The federation will rely on banks collectively regulating themselves without help from the Central Bank, Mr Al Ghurair said.
There are also plans to create a website that will allow consumers to expose lenders that provide bad service and products.
Eliminating deceptive bank advertising on loan interest rates and credit cards as well as cracking down on overzealous bankers seeking to fulfil targets unethically will be high on the agenda of the federation’s code, he said.
Such bankers who exploit loopholes should be suspended, Mr Al Ghurair added.
“It was OK in the UAE to advertise that I will finance your car for 2.5 per cent. [The] customer looks at it and says great, a very competitive bank,” Mr Al Ghurair said. “He goes and does this and six months later the customer realises that it is not 2.5 per cent … We are saying no more banks will do these kinds of tricks.”
Andre Sayegh, the chief executive of First Gulf Bank, said at the conference that it would be a “win win” proposition that would inspire more trust in banks and, by extension, their profitability.
Mr Sayegh played a key role in formulating the code.
“This document represents the collective desire of our member banks to apply world class standards both in terms of the way they operate and how they provide services to their customers,” said Mr Al Ghurair.
“Though these are in effect guidelines, we will take any breaches in their application very seriously and will seek remedial action from any member bank that is not meeting the standards set out in the code,” he added.
Mr Ghurair said that it would take about six months for the code to be fully implemented.