commercial banks in the United Arab Emirates called organizations licensed to conduct commercial banking operations in accordance with the law or executive order and a joint stock company.The exception to this rule are the branches of foreign banks operating in the UAE.
Commercial banks in the UAE are divided into two categories: local joint-stock banks and branches of foreign banks.Historically, national and foreign banks already existed before the formation of the UAE in 1973. UAE Monetary Committee and therefore to the creation of the Central Bank of the UAE.In such circumstances, the number of banks and their branches in the UAE has grown very rapidly and in an apparent disproportion with the capabilities of the local market.This prompted the monetary authorities to contain at that stage of licensing new banks and a policy of reducing the number of branches of foreign banks to a maximum of eight offices.
As of January 1, 2012, the United Arab Emirates have been reported and there were 23 national banks (including five Islamic) and 28 branches of foreign banks.
main criterion for classifying organizations to commercial banks is that the resources for the issuance of loans and advances to commercial banks usually formed by attracting deposits (demand deposits (or demand deposit), with prior notice and term) from individuals and corporate clients, as well as by placingmarket debt instruments (bills, bonds, certificates of deposit).Commercial banks are also characterized by operations for the production and collection of checks, the organization of public and private placement bonds, foreign currencies and precious metals and other banking transactions permitted by the law or committed in the force normal banking practices.
Board of Directors of the UAE Central Bank defines the direction and scope of the activities of commercial banks with restricted license and, if necessary, specifies cases of non-proliferation provisions of their legislation on commercial banks.
Paid-in capital national commercial bank in the UAE not be less than 40 million dirhams (about 10.9 million dollars. USA).Branches of foreign banks must be placed in the Central Bank of the UAE equivalent amount in a freely convertible currency as capital assets for banking activities.The requirements to the minimum amount of capital a commercial bank may be reviewed by the Board of Directors of the Central Bank of the UAE, approved by the Council of Ministers.Executive Order shall be published in the Official Gazette (The Official Gazette).In the case of reducing the amount of capital below the statutory level of the Executive Committee of the Central Bank of the UAE determines the size of the shortfall and appoints bank for capital to fill to the desired size.This period may not exceed one year.The Executive Committee has the exclusive right to deal with this kind of questions.
In deciding whether to grant banking licenses to commercial banks Central Bank of the UAE controls the availability of its constitutional provisions on the annual deposit of 10% of net income as a special reserve until such time as the size of the reserve does not reach the level of 50% of paid-up capital or its equivalent in a freely convertible currencyplaced in the Central Bank of the UAE branches of foreign banks.
banking license - a prerequisite beginning of the commercial bank.It is issued by the chairman of the Central Bank Board of Directors authorized the UAE or with the consent of the board of directors face with the publication of relevant information in the Official Gazette and the entry of licensed bank in leading the Central Bank of the UAE registry.In case of refusal to issue a license notice thereof is sent to the applicant bank within 15 days from the date of the decision of refusal.
Board of Directors of the Central Bank of the UAE determines the binding order by the Bank for the issuance of a license, the list to be submitted documents and information as well as rules for opening by banks of their branches (opening of new branches in the UAE or abroad, transfer them to other places, closing).
Any changes to the Bank's Charter shall come into force from the date of their registration in the register based on the decision of the control of the Central Bank of the UAE.Rejected requests for registration of amendments to the statutes may be appealed to the Board of Directors of the Central Bank of the UAE, whose decision is final.
Termination of commercial banks (including in connection with the merger with another bank) is allowed only with the permission of the chairman of the Board of Directors or its authorized with the consent of the Board of Directors of the face.Resolution can not be issued until such time as the Central Bank of the UAE is satisfied that the applicant has fulfilled all its obligations to clients and creditors and settle them acceptable to the Central Bank of the UAE form.
exception of commercial bank from the register in the following cases:
- at the request of the commercial bank;
- if the bank fails to commence operations within one year from the date of notification of registration;
- if the bank ceased operations more than a year;
- if the bank is declared bankrupt;
- in the event of a merger with another bank;
- in the event of a serious deterioration in the liquidity and solvency of the bank;
- in the case of gross violations of bank laws, regulations, guidelines, directives and guidelines governing the banking activities in the country.
exception of commercial bank from the register of authorized chairman or authorized, with the consent of the Board of Directors of the entity.The decision to exclude the bank from the register comes into force or from the date of its publication in the Official Gazette, or from the date indicated in the decision itself.At the same banking license is automatically revoked from the date the decision on the exclusion of the bank's name from the registry.
Excluding the bank's name from the registry makes it mandatory liquidation, unless supply bank statements to exclude it from the registry.Liquidation is carried out in accordance with applicable laws and regulations contained in the Bank's decision to exclude from the register.
The general rule is to place the ads on the ongoing liquidation of a commercial bank in the Official Gazette and in at least two daily newspapers at the location of the legal address of the bank.The declaration must be specified grace period for acceptance of customers and creditors of measures for realization of their rights, reported the name of the liquidator, authorized to carry out payments on outstanding deposits and other transactions that may have occurred after the closing of the bank and which previously customers had not been reportedno proposals.
case of liquidation of the bank due to the exclusion of his name from the register bank chairman or a person authorized by its decision to exclude from the register may specify the date of the closing of the bank and name of the organization, which is entrusted to completion has not settled on the closing date of the transaction.UAE Central Bank oversees the operations of the bank in the process of liquidation, up to the final closing of its offices.
the types of operations performed by commercial banks the UAE, it should be noted that they are similar to the operations of commercial banks in other countries and in the region and considered by us, in particular, in the article about the banking system of the State of Qatar.Here briefly the legislative constraints in the implementation of some operations by commercial banks of the UAE.
restrictions for commercial banks
In particular, commercial banks forbidden to engage in their own activities related to the production and (or) sale of goods.An exception is the reception of the goods in the collection of receivables to the bank counterparties.However, the property thus obtained to implement prescribed in the terms defined by managing commercial bank.
Limited and the right of commercial banks to purchase on their behalf (to take on its balance sheet) property, are not fixed assets (buildings and office premises, housing for staff) or property transferred by the debtor to pay its debt to the bank.Property received to offset the debt, as a rule, to be implemented within three years from the date of purchase, however implementation period may be extended by the manager of a commercial bank.
Commercial banks are prohibited to keep possession or trade their shares, except getting them to pay the debt.In this case, they are to be sold within two years from the date of purchase.
Commercial banks are not allowed to purchase shares or bonds of private trading companies in excess of 25% of the bank's own funds, except in the case of acquisition of repayment of debt.In this case, excess securities must be sold within two years from the date of their acquisition.This restriction does not apply to the purchase of shares of commercial banks and bonds issued or guaranteed by the federal government or state organizations.
separate group limit is lending limits of the executive staff of commercial banks, individual customers and facilities:
- loans and advances to members of boards of directors, directors of departments and other senior staff within the balances in their current accounts at the Bank may be issued only in accordance with pre-approve the annual license-estimate;
- banks are not allowed to lend to their customers by providing them with shares in the capital of the bank;
- total amount of loans and credits, issued for the construction of commercial or residential property may not exceed 20% of total deposits.An exception is made only for banks specializing in the provision of mortgage loans in accordance with a special license Central Bank of the UAE;
- without the prior permission of the Central Bank of the UAE commercial banks have no right to issue traveler's checks.