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What is a bank secrecy? What is the degree of a bank’s responsibility for its disclosure?

Article image: What is a bank secrecy? What is the degree of a bank’s responsibility for its disclosure?

Privacy is one of the main issues of concern for bank clients. Let us understand what is included in the concept of bank secrecy, and what is the responsibility of a bank for its unlawful disclosure.

The concept of bank secrecy implies a prohibition on disclosing personal data of clients, their transactions, deposits, credits, accounts. According to the law, each bank must guarantee its customers a bank secrecy.

 

What is a bank secrecy?

  • Personal information;
  • Client's financial condition;
  • Bank accounts;
  • Information about deposits;
  • Credit information;
  • All transactions conducted by the client and his authorised representative;
  • Commercial information, including information about sample of products, inventions and projects;
  • Information about legal and organizational structure of the company, including the activity area of the company and data on its top managers;
  • Codes that are used by a bank for the purpose of information security.

What is the degree of a bank’s responsibility for a bank secrecy disclosure?

Disclosure of bank secrecy can be fraught with serious consequences. For example, dishonest partners can withdraw money or inflate the cost of services deliberately after finding out how much money does the entrepreneur have, or, if he has not much money, on the contrary, they can try to put him out of the market, halt supplies, etc.

If a bank discloses confidential information to the third parties or uses it in personal interests, it is considered a violation of bank secrecy. A bank should be brought to responsibility for such actions: from penalty payment to starting a criminal proceeding.

Clarify the cost of opening company, corporate or personal bank account, obtaining a residence visa, or another question regarding business in Dubai, UAE:

To ensure bank secrecy a financial institution should:

  • limit access to the confidential information to a certain circle of persons;
  • use technical means to protect data from illegal access;
  • provide a special system of managing documents that contain bank secrecy;
  • agreements and contracts with the clients must specify the notes on maintenance of bank secrecy.

Also, all bank employees are obliged not to use or disclose the data of which they have become aware while performing their duties.

Today, the UAE is the best jurisdiction among those ensuring confidentiality. All the UAE financial institutions adhere to keeping bank secrecy as the country's legislation provides criminal liability for its disclosure. Besides, the UAE banks are highly protected from the influence of Western authorities.

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