In a significant legal victory for borrowers, an Abu Dhabi appeals court has ruled in favor of a retired Emirati in a loan dispute with his bank, setting a precedent for fair treatment of retirees in financial agreements. The court found that the bank had unlawfully deducted more than 30% of the retiree’s pension to recover outstanding loan payments, violating federal regulations. The ruling overturned a lower court’s decision favoring the bank and reinforced the Central Bank’s 30% cap on deductions from pensions or salaries for loan repayments. The case involved a lease-to-own home-financing agreement for a villa in Abu Dhabi’s Al Rahba area. The retiree had maintained regular payments until his employment ended, after which the bank continued deducting the same amount from his pension. The appeals court emphasized that banks must adjust repayment schedules when borrowers face significant income reductions, such as retirement. Legal experts hailed the judgment as a judicial precedent that strengthens borrowers’ rights across similar cases. Abu Dhabi lawyer Ali Al Abbadi, who represented the retiree, stated that the ruling confirms Central Bank circulars cannot override federal law and that banks are legally bound to comply with the 30% cap. The verdict, issued last week, is subject to further appeal by the bank within 30 days. This landmark decision underscores banks’ responsibility to ensure repayment plans remain fair and affordable, particularly for retirees and those experiencing income loss.