Seven exchange houses in UAE are downgraded for money-laundering offences
The Central Bank of the UAE downgraded the licences of seven exchange houses yesterday after the companies violated regulations such as anti-money laundering rules.
The exchanges are now banned from carrying out transactions related to remittances or wage payments, the Central Bank said in a statement. They can only deal in the sale and purchase of foreign currencies and traveller’s cheques, it said.
“This decision comes after the failure of these exchange houses to regularise their status during the grace period granted by the Central Bank,” the financial institution said, explaining that the companies “violated the Central Bank’s regulations, including anti-money laundering regulations”.
Remittances are a rich source of business for exchanges in the UAE. In the first quarter of this year, the amount sent by expatriates to their home countries rose by 17 per cent to Dh43.5 billion compared with Dh37.1bn a year ago, according to the state news agency Wam.
Indian workers led the remittances with Dh16bn, followed by Pakistanis, Filipinos and Omani expatriates.
About 70 per cent of remittances were done through exchanges.
The Central Bank’s licence downgrade decision has affected: Taher Exchange, Al Hadha, Al Hemriya Exchange Company, Dubai Express Exchange, Sanaa Exchange, Cosmos Exchange and Bin Bakheet Exchange.
Abdul Salim, an accountant at Sanaa Exchange near the Dubai Gold Souk, said the exchange house did not know why the Central Bank had downgraded its licence.
“The Central Bank stopped all remittances and salary payments last week,” he said.
“My manager is out of the country and when he comes back he will meet the Central Bank – then we will know what the reason is. This is having a big effect on business.
“The business is facing a big problem.”
The Central Bank said “it will not tolerate violations of financial institutions to its regulations and instructions”, and urged UAE consumers not to remit funds or pay wages via the exchange houses listed.