Legal concerns delay creation of new bank

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NEW BANK: Emirates Development Bank would be given AED10bn, with AED5bn from the government, to start up.

The Federal National Council (FNC) delayed the creation of a new UAE bank asking for further studies to be carried on the laws that would govern it.

The FNC went into recess on Tuesday, meaning no decision will be made on Emirates Development Bank (EDB) until after the summer break.

The bank is a proposed tie-up between the Emirates Industrial Bank (EIB) and Emirates Real Estate Bank, along with Amlak and Tamweel, two large Dubai-based Islamic mortgage firms.

To start, EBD would be given AED10bn, with AED5bn from the government and would invest in real estate projects, reported the National.

Abdullah bin Nasser, an FNC member, said: “We know that the merger was a result of failed practices from before, so what assures us this will not be the same process all over again?

“We need competition. We cannot have one bank do two very integral things. If we study the merger it will be clear that it happened because of the financial situation.”

Obaid Humaid al Tayer, the Minister of State for Financial Affairs, told members of the council the merger was not due to the global financial crisis, but out of date banking laws, which date back to 1982.

The bank, which would be set up in Abu Dhabi with possible branches across the country, was approved by the cabinet last week, WAM reported.

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