UAE Court fines foreign bank Dh1.82m for delaying liability letter

A foreign bank branch in the UAE has been ordered to pay Dh1.82 million in compensation to a client following a significant delay in issuing a liability letter. The Abu Dhabi Court of Cassation upheld a previous ruling, finding the financial institution liable for losses incurred by the customer due to administrative negligence. Financial Impact and Legal Breach The case originated when the customer requested a liability letter to transfer an existing loan to another bank offering more favorable terms. The bank delayed the issuance of the document for 44 days, exceeding the seven-day limit mandated by the Central Bank of the UAE. During this period, the alternative financing offer expired, preventing the client from refinancing the debt at a lower rate. Evidence presented in court showed that the bank’s inaction directly resulted in measurable financial harm. The Dh1.82 million penalty includes compensation for the lost opportunity to refinance and the accumulated interest the client was forced to pay because of the delay. Regulatory Compliance Standards The ruling highlights the enforcement of Central Bank regulations regarding consumer rights and banking transparency in the…