UAE publishes new transparency guide for banks

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MONEY MATTERS: The UAE Central Bank has issued new guidelines for corporate governance.

The UAE's top regulator on Thursday issued a draft of new corporate governance guidelines for its banking sector, the first update in seven years in a region that has been criticised as lacking transparency.

The Central Bank's guidelines are the latest efforts by authorities in the Gulf region to restore confidence in local banks, caught in a deep downturn as a result of the global economic and credit crisis.

Last year Dubai, one of seven emirates in the UAE, launched an anti-corruption drive, resulting in several high-profile arrests.

"Commercial banks are leading contributors to a successful UAE economy and are expected to show the way on high management standards and corporate governance," Central Bank governor Sultan Bin Nasser al-Suweidi wrote in a foreword to the guidelines.

"If a bank fails it affects the whole economy so (banking) directors are the guardians of financial stability," he added.

The governor urged banks to improve disclosure standards, increase transparency and to put risk committees in place.

"Such improvements will be value-adding and will reinforce the international competitiveness of UAE banks," he said.

The corporate governance guidelines are based on international regulations, but the central bank emphasised they "are firmly rooted in and tailored to the national environment."

Policymakers worldwide are seeking to reform the regulatory framework in response to the credit crisis. US President Barack Obama announced plans on Wednesday to overhaul the US financial regulatory system.

The Oman and UAE central bank chiefs expressed concern this week about commercial banks' exposure to two troubled Saudi conglomerates. (ReutersP

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READERS' COMMENTS

to much to learn for banks in UAE
Posted by nasir, dubai on Sunday 21 June 2009 at 14:26 UAE time


i was astonished to learn that there is not fixed rate mortgage here, even the floating rates are non verfiable and banks can changes rates at will with no reference to the contract

banks here have a lot to learn, but on the other side the regulators dont even know what they are supposed to do

banks are exploting the customers and the govt does not care

The banks here have unexplained charges for nothing
Posted by Jim on Saturday 20 June 2009 at 10:10 UAE time


One opens a bank accpunt volantarily, uses it for few years and closes it volantarily in line with all the weird rules and regulations laid by the bank. The other banks due to whatever reason will ask you a clearance certificate although you have a other documents hsowing account closed. To issue such a certrificate the original bank asks a exhorbidant fees for that. Such many fees are there which are unexplained.

Negotiate
Posted by The Don, Dubai, United Arab Emirates on Friday 19 June 2009 at 09:43 UAE time


To Geekay

Just negotiate, make sense, and logically challenge the bank for any request/charges they are asking for. In my case I challenged my bank for a credit insurance contract which turned to be none-existence in the sense they don't have an insurance company behind it: it was just an internal fund in which premium collected from retail customers goes to it and they use it to write-off a portion of the debt.

Fees & Charges of Banks
Posted by Kaushalendra Gupta, Dubai, UAE on Friday 19 June 2009 at 03:37 UAE time


The banks should be clear for the fees & charges for their products.The Central Bank of UAE must have a check on the banks regarding above mentioned.Take an example different banks charge fees & interest on their products but why these charges vary from bank to bank whereas they all are doing business in the same country.These fees & charges should be taken care by the Central Bank & should be uniform,a bit difference can be understood.th

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