UAE’s New SME Banking Rules Take Effect: What Small Business Owners Need to Know
The practical implications of these rules for managing banking relationships and operating costs.
The Central Bank of the UAE has introduced new rules governing how banks and finance companies deal with small and medium-sized enterprises (SMEs), covering banking fees, account-opening requirements, financing decisions, debt collection and customer complaints.
The Small to Medium Sized Enterprises (SME) Customer Protection Regulation, issued as C 2/2026, took effect on 13 September 2026, replacing the previous SME Market Conduct Regulation issued in January 2021.
Banks Must Disclose Fees and Product Conditions
The regulation requires financial institutions to provide clear, accurate and comprehensive information about their financial products and services before customers make decisions. This includes information about costs, fees, interest or profit rates, risks, collateral requirements and the consequences of late or missed payments.
Before providing a financial product or service, institutions must also give customers a Key Facts Statement explaining the product’s important characteristics. Customers must acknowledge receiving this statement before entering into the contract.
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Banks must provide written information about the stages of an application process, its expected timeline and the status of an application at relevant stages. If an application is rejected, the institution must generally explain the reason in writing, except where disclosure is restricted by financial-crime obligations or applicable law.
These requirements give business owners more specific information to examine when applying for a business account, loan or other financial product. Rather than relying solely on a verbal explanation, owners can request the relevant written disclosures and compare the available options before committing.
Banks must also give small business customers at least 60 calendar days’ written notice before changing agreed banking terms or fees. This gives business owners time to prepare for higher charges or other changes that could affect their operating costs.
Banking Fees Must Be Fair and Proportionate
Under Article 4.39, financial institutions must ensure that fees are fair, reasonable and proportionate to the costs they incur. Institutions must consider the size of the customer and the customer’s related financial capacity when determining the appropriateness of charges.
For small businesses paying account-maintenance fees, transaction charges or other banking costs, this provision is relevant when reviewing the fees applied to their accounts.
However, the regulation does not establish a single fee schedule for all banks or automatically entitle every SME to free banking. Business owners should examine their account agreements, published fee schedules and any notices of changes to charges.
The regulation also prohibits abusive sales, marketing and pricing practices. Financial institutions must not make the sale of one financial product or service conditional on purchasing another, including through tied selling or bundling.
For an SME considering a loan alongside other banking products, this means the business should understand whether the products are genuinely optional or whether the institution is presenting a condition that conflicts with the regulation.
New Requirements Govern How Banks Assess Financing
Article 5 introduces responsible-financing requirements for financial institutions. Banks must not provide credit beyond amounts the customer is capable of servicing, based on the institution’s assessment of the customer’s ability to meet its credit obligations. They must examine the customer’s credit record, assess solvency and ability to meet monthly payments, and document the information used in the assessment.
The regulation also states that credit must not be granted or extended without a prior request from the customer expressed in writing. These provisions are relevant to businesses considering borrowing to purchase equipment, expand operations or finance working capital. Owners should understand the repayment schedule, total financing costs, collateral requirements and potential consequences of missing payments before accepting an offer.
The rules do not guarantee that a bank will approve an application, provide credit without collateral or offer a particular interest rate. Each application remains subject to the applicable assessment and regulatory requirements.
Banks Must Follow Standards When Opening Accounts
The regulation establishes standards intended to promote fair treatment and improve SMEs’ access to financial products and services.
Financial institutions must disclose the documents and information required to offer a product or service. They must also provide information about the application process and keep customers informed about the status of applications.
The regulation addresses discriminatory treatment in the provision of financial services. Its provisions require institutions to incorporate anti-discrimination principles into their internal codes of conduct and prohibit rejecting applications on discriminatory grounds.
These requirements do not remove banks’ obligations to verify customer information, conduct due diligence or comply with financial-crime regulations. An institution can still reject an application for legitimate reasons consistent with applicable law.
For business owners opening an account, the practical step is to obtain the institution’s documentation requirements, submit complete records and request a written explanation if an application is rejected, subject to the applicable exceptions.
Businesses Facing Repayment Difficulties Have Specific Protections
The regulation includes requirements for financial institutions dealing with customers experiencing financial difficulties. Articles 4.21 to 4.26 address assistance when payment irregularities arise, frameworks for supporting customers in financial difficulty, possible restructuring or modification of credit products, adjusted payment plans and credit counselling. They also establish requirements concerning communications with customers in arrears and the prevention of excessive pressure during debt collection.
These provisions matter to businesses whose cash flow has deteriorated or whose customers are paying them late. A business that anticipates difficulty meeting its own loan repayments should contact its lender promptly and explain its circumstances.
Depending on the situation, the business can ask whether a revised repayment schedule, restructuring or another support measure is available. The regulation does not automatically suspend repayments, cancel outstanding debt or guarantee approval of a restructuring request.
Business owners should keep written records of discussions with their lenders and ensure they understand the contractual consequences of missed payments.
Complaints Must Be Handled Through a Formal Process
Article 6 requires financial institutions to maintain an accessible and transparent complaint-handling process that is provided without fees.
Banks must acknowledge receipt of a complaint in writing within two business days and provide a unique reference number. They must generally issue a written final response within 30 business days, with detailed reasons for their decision, subject to applicable regulatory requirements.
The response must also explain how unresolved complaints can be escalated to an available external financial complaints-resolution function, including the Sanadak Ombudsman Unit.
For an SME disputing a charge, questioning how an application was handled or raising concerns about a financial product, these requirements provide a formal route for seeking a response.
Businesses should submit complaints through the institution’s designated process and retain copies of the complaint, supporting documents, acknowledgement and final response. If the matter remains unresolved, they can review the escalation process explained by the institution.
Switching Banks and Reviewing Existing Agreements
The regulation also addresses customers who wish to transfer their banking relationships to another institution.
Financial institutions must not create unreasonable barriers to using financial products and services or prevent customers from switching banking relationships through unjustified practices. The rules require transparent transfer procedures and reasonable, disclosed costs and timeframes.
Certain transfer-related information and assistance must be provided without additional fees under the regulation. However, this should not be interpreted as a guarantee that every aspect of changing banks is free of charge.
An SME considering a transfer should compare the costs and conditions of the new arrangement, confirm the documentation required and establish how outstanding facilities or other contractual obligations will be handled.
What Small Business Owners Should Do Now
The new regulation gives eligible SME customers a clearer framework for assessing their dealings with banks and finance companies. Business owners should review their account charges, request the required product disclosures, understand financing obligations and familiarize themselves with their bank’s complaint process.
Those applying for credit should pay particular attention to the Key Facts Statement, repayment schedule, collateral conditions and written explanation of the application process. Businesses already experiencing financial difficulties should contact their lenders early rather than assume that repayment relief will be granted automatically.
The regulation is not a promise of cheaper loans, free accounts or automatic access to finance. Its significance lies in the specific standards it establishes for transparency, responsible financing, fair treatment and complaint resolution.
For UAE small business owners, understanding these provisions can help them ask more informed questions, evaluate financial products and identify the appropriate steps when a banking issue arises.
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