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Mon 6 Dec 2010 07:25 PM

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UAE president approves personal credit ratings office

Global credit crunch exposed borrowing excesses in the Gulf Arab state

UAE president approves personal credit ratings office
Missing credit rating office left thousands of UAE citizens and residents exposed to heavy borrowing used for car and house mortgages as well as credit cards

The UAE president Sheikh Khalifa bin Zayed al Nahayan on Monday approved the launch of an office to assess individuals' credit worthiness, which an official said should help banks make better lending decisions.

"(The credit bureau) provides complete transparency on the status of clients and the bank would have a clear vision," Federal National Council (FNC) speaker Abdul Aziz al Ghurair told reporters on the sidelines of the Gulf rulers summit in Abu Dhabi.

He said: "This helps banks as well as clients avoid uncertainty."

Ghurair, who is also the CEO of Dubai based Mashreq Bank, said the plan will make the banking system in the world's third largest oil exporter more conservative.

He said: "No doubt, more conservative in a positive way, it would be better for clients not to borrow more than they can afford and preserve reputation of the banking sector."

The global credit crunch exposed borrowing excesses in the second largest Arab economy, where expatriates and locals alike enjoyed lavish lifestyles helped by easy credit during the oil-fueled boom years.

The FNC, a parliamentary body which monitors and debates the government policy but cannot initiate any legislation by itself, passed the credit rating bureau bill last year.

Its members have complained that the missing credit rating office left thousands of UAE citizens and residents exposed to heavy borrowing used for car and house mortgages as well as credit cards.(Reuters)

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