Abu Dhabi In a landmark move aimed at strengthening financial inclusion, the Central Bank of the UAE (CBUAE) has directed all banks to eliminate the long standing minimum salary requirement for personal loans. For years, most banks across the UAE required applicants to earn at least Dh5,000 per month to qualify. The new directive marks a major shift, opening doors for thousands of low income residents to access formal financial services.
What Does This Mean for You?
Under the new directive, individual banks will now set their own salary criteria. This shift opens the doors to formal banking for a wider segment of the population, including young professionals, low wage earners, and labors.
Banks to Set Their Own Criteria
Under the updated framework, individual banks will now be responsible for establishing their own salary thresholds and lending criteria based on internal policies. This flexibility allows financial institutions to design products that better match the needs of different customer segments, including young adults, low wage earners, and blue-collar workers.
The removal of the blanket minimum income rule is expected to boost access to “cash on demand” and other essential banking services for individuals who were previously excluded due to low earnings.
Key Benefits of the Change:
Easier Access to Bank Accounts and Loans
One of the key benefits of the new regulation is the ease with which low-income residents will now be able to open bank accounts. These accounts will be connected to the Wage Protection System (WPS), the UAE’s digital platform ensuring timely wage payments.
Linking accounts to WPS also enables banks to automatically deduct loan instalments once salaries are transferred. This reduces lending risk and encourages banks to extend more credit to workers with modest incomes.
Access for All:
More residents can now open bank accounts and access financial services like “cash on demand” loans.
Secure & Automated Repayments: Accounts will be linked to the Central Bank’s Wage Protection System (WPS), allowing for secure and automatic deduction of loan instalments as soon as a salary is deposited.
A Step towards Inclusion: This initiative is a crucial part of the UAE’s broader strategy to ensure every resident has access to safe and regulated banking, bringing more people into the financial mainstream.
This landmark decision empowers more individuals with financial tools, fostering greater economic participation and security for all residents.
