Al-Markazi: Its scope of work is within the state only, and it is permitted to provide digital money services
A system for establishing banks that provide services to citizens and residents in "dirhams"
The Central Bank stressed the importance of the specialized banks ’commitment to the credit reporting requirements.
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The Central Bank has issued a system that allows the establishment of low-risk specialized local banks that focus on providing their services to the local market only at the level of individuals and companies, and in local currency only, as well as providing digital money services and deposits in dirhams.
The Central Bank said in a circular that it sent to banks and finance companies yesterday that it issued a system allowing licensing for specialized banks with the aim of protecting their depositors and consumers of their services, and preserving the overall stability of the financial sector.
The Central Bank stated in the details of the system that it published on its website that the scope of work of these banks will be within the UAE only, provided that they provide their services to citizens and residents of the country in the local currency (dirham).
The "Central" indicated that those banks must maintain a minimum of the paid-up capital, which is 300 million dirhams, as specified in the system of the minimum capital for banks.
He added that the specialized banks must strictly adhere to the following credit reporting requirements: Provide credit information to borrowers to Al Etihad Credit Bureau, and any other future credit information agencies that may be established in the UAE, on a monthly basis at least, and request credit information about borrowers from a company Al Etihad Credit Bureau before granting credit to an individual or company borrower.
According to the system, the financial year of specialized banks begins on the first of January and ends on December 31, and they must regularly report on their outsourcing arrangements, in the form and timeframe specified by the Central Bank.
The system affirmed that no single ownership in a specialized bank is liable to exceed 20% of the total shares, and the ownership of UAE citizens of the specialized bank must constitute at least 60% of the paid-up capital, while no specialized bank may exceed its assets. Collected 25 billion dirhams.
He explained that it is not necessary for the specialized banks to buy or own any real estate except for the one that it uses as its headquarters, and that deposit accounts should only be opened for residents within the UAE only.
• Specialized local banks cannot buy or own any property except for their headquarters.
Activities of specialized banks
Local specialized banks are allowed to engage in the following financial activities:
■ Financing individual dealers, including personal and auto loans.
Mortgage financing, including residential and commercial mortgages.
Business financing, including large corporations and small enterprises.
■ Issuance of credit, debit and prepaid cards.
■ Providing stored value services, electronic payment services for individuals, and digital money services.
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