The UAE Central Bank says lenders have been receptive to new retail rules designed to curb high service fees and excessive lending.
Banks will have to start complying with the changed retail lending system when it becomes law from May 1.
"Banks have been broadly supportive," said a Central Bank spokesman, who asked to remain anonymous.
However, the regulator will consider making changes to the rules, even after May 1, if enough lenders raise concerns about the new regime, said the spokesman.
"The Central Bank will take all the comments and responses from banks [into consideration] and if there's a valid point … it's possible to change if there's good reason," he said.
The limits cover personal and car loans, with caps for the amount banks can lend to customers at 20 times their salary and the maximum period of loan repayment at 48 months. In addition, the rules restrict the service fees lenders can charge for personal accounts, cheques and debit cards.
Officials met banking representatives last week to discuss the legislation. During the meeting the regulator rejected a request by banks to extend the deadline for the rules to give lenders more time to prepare, Al Khaleej newspaper reported last week.
Analysts have already suggested the rules may dent bank profits by slowing lending activity and stunting fee-income generation.
Banks have already been consulted about the changes. As a standard practice, the Central Bank asked banks their views about any proposed revisions to the law before they became final, said Sulaiman al Mazroui, the chairman of the Bankers' Business Group in the UAE.
"We raised a lot of issues about lending limits as some were established in the 1980s or 1990s and required a review," he said.
"The Central Bank has come up with what they consider to be most useful regulations for the economy and consumers."
A tide of bad consumer debt linked to the global downturn led to proposals to tighten lending limits. Banks were previously free to extend hefty loans to consumers because of relaxed borrowing rules, which capped personal loans at Dh250,000 (US$68,000). As a result some lenders were burnt when customers became unable to repay debts during the downturn.
Rising numbers of complaints from customers frustrated at how much banks were charging for basic services prompted the regulator to draw up a fresh fee structure.
Banks have been told to adhere to the system from May 1 after the rules were published in the official gazette on March 31. Sultan al Suwaidi, the Central Bank Governor, has warned of fines for those lenders failing to comply with the new regime.
* with additional reporting by Gregor Stuart Hunter