The UAE banking system

The banking system of the Arab Emirates consists of the Central Bank and other local and foreign banking institutions. The Central Bank of the UAE performs key functions in the economy of the country and is a well-established financial structure. It provides consultations and financial support to the Government of the United Arab Emirates, issues national currency (the United Arab Emirates dirham), keeps control over activities of the UAE banks, etc.

The UAE Central Bank imposes quite strict requirements for licencing of foreign and local banks, as well as for the scope of their services. That is why the financial market of the Emirates offers only reliable and reputable banks with a full range of services for companies and individuals.

The investment banks and commercial banks with a limited license of the Arab Emirates are worth to be singled out. The UAE investment banks are not banking institutions in the classic sense. Such banks take deposits for a minimal period of 2 years and attract investments from foreign and local banks.

Banks with a limited license, in their turn, differ in the fact that they take deposits only in foreign currency (not in dirhams). The loans are granted to both residents and non-residents of the UAE.

Features of the UAE banking system

Besides the above, the United Arab Emirates also uses the Hawala System. This system is designed to control the rules of carrying out financial settlements and is unofficially used in all other states of the Middle East, as well as in some countries of Asia and Africa.

The Hawala System is mainly used when making payments for foreign employees. Hawala provides banking operations via fax, e-mail, or telephone banking.

Advantages of the UAE banks

Nowadays, many offshore jurisdictions are under the pressure of the most powerful countries in the world. Today, even Swiss banks cannot provide 100% confidentiality of information about their clients.

On this background, the banking institutions of the United Arab Emirates serve as the best alternative. The UAE banks enjoy strong economic performances as well as independence from international financial institutions, and therefore become more popular among foreign investors and business owners.

Key advantages of the UAE banks:

• No currency exchange control by the state;
• Stable and robust economy;
• Modern and reliable banking system.

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