UAE credit bureau set to strengthen fi­nance sec­tor

The Pak Banker - - Company& -

DUBAI: Banks across the coun­try will be re­quired to sup­ply credit in­for­ma­tion about their cus­tomers to a cen­tral data­base un­der a Fed­eral law de­signed to im­prove the trans­parency of bor­row­ing.

The cre­ation of a credit bureau has been ap­proved by Sheikh Khal­ifa, Pres­i­dent of the UAE, said Zaid Kamhawi, the chief busi­ness of­fi­cer at Em­credit, a credit bureau based in Dubai.

"This will strengthen the credit in­for­ma­tion le­gal in­fra­struc­ture of the UAE by re­quir­ing banks and other fi­nan­cial in­sti­tu­tions to pro­vide their credit in­for­ma­tion," he said.

Obaid al Tayer, the Min­is­ter of State for Fi­nan­cial Af­fairs, said last night of­fi­cials from the Fi­nance Min­istry and Cen­tral Bank were pre­par­ing the by­laws for the Fed­eral credit bureau, which is ex­pected to start op­er­at­ing within six months.

The es­tab­lish­ment of a Fed­eral credit bureau fol­lows a pe­riod of turmoil in the coun­try's fi­nan­cial sys­tem dur­ing the global fi­nan­cial cri­sis linked to the non-pay­ment of con­sumer debts and busi­ness loans.

Many banks have re­mained re­luc­tant to in­crease lend­ing - re­quired to spur eco­nomic growth - over re­cent months due to un­cer­tainty about the build-up of bad loans on their bal­ance sheets. Of­fi­cials hope a ded­i­cated credit bureau will pro­vide the fi­nan­cial ser­vices in­dus­try with bet­ter credit in­for­ma­tion, help­ing to as­sist banks with their lend­ing de­ci­sions. A law was passed by the Dubai Govern­ment in July re­quir­ing lo­cal and in­ter­na­tional len­ders op­er­at­ing in the emi­rate, as well as or­gan­i­sa­tions out­side the fi­nan­cial sec­tor such as util­i­ties and telecom­mu­ni­ca­tions com­pa­nies, to share client in­for­ma­tion within the UAE with Em­credit. - PB News

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