UAE banks urged to show caution over adulthood age change

• Age of civil adulthood now 18
• Broader access to financial services
• Extra checks advised for credit products

UAE banks and financial institutions are being urged to tighten how they assess younger customers following a legal overhaul that lowers the age of civil adulthood by three years to 18. 

The law places greater responsibility on lenders to ensure products are suitable and affordable.

Amendments to the Civil Transactions Law reduce the age of legal adulthood from 21 lunar (Hijri) years to 18 Gregorian years, meaning 18-year-olds are now fully recognised as legal adults for managing their own affairs.

For core banking services, the change is largely symbolic. Most UAE banks already allow customers to open accounts in their own name from 18, with younger individuals requiring a parent or guardian. 

The real impact is expected in consumer credit, instalment plans and buy-now-pay-later products, where contracts signed by 18- to 21-year-olds will be easier to enforce, increasing the likelihood that younger customers take on long-term financial obligations.

“As a result, lenders and providers will need to place greater weight on affordability checks, disclosures and product governance for customers in the 18 to 21 age bracket,” said Hashem Alahdal, an associate at Dubai-based BSA Law.

Other areas such as banking regulation, employment, driving and personal status remain subject to separate legislation, meaning institutions can still apply their own age, income or suitability requirements. 

Even so, Alahdal said the clearer civil-law baseline could encourage broader access to financial services over time.

“The reform supports financial inclusion and reduces age-related enforceability uncertainty,” he said.

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The Central Bank of the UAE has been contacted for comment.

The scale of consumer credit in the UAE is already significant: the number of active contracts, including loans and credit cards, reached 9.8 million by the end of December 2023, according to the Al Etihad Credit Bureau.

“Encouraging young adults to take on debt at such an early stage is, in my view, irresponsible,” said Keren Bobker, an international financial adviser and senior partner at Holborn Assets. “I would strongly discourage any bank from actively promoting credit products to this age group.”