Unified UAE Legislation Database

FAQ: Can a bank recover a loan debt if it issued the loan without obtaining sufficient guarantees from the borrower?

Status

In force

Issuing Authority

Effective date

XX.XX.XXXX

Official Link

https://

Answer: No, it cannot.

 

According to Article 121 (bis) of Federal Decree-Law No. 14 of 2018, all financial institutions are required to obtain adequate guarantees that correspond to the client's income and the loan amount. Otherwise:

- any complaint or legal claim filed by the bank must be rejected,

- if the loan was granted without security that meets the prescribed criteria.

 

Relevant case law:

Case No. 197 of 2025 / Federal Supreme Court / Commercial.