If you’re new to the UAE, it’s important to understand how the banking system works. The country has an advanced banking system that allows its citizens access to a wide range of financial services.
There are 11 local banks in the UAE and they operate under strict rules set by the Central Bank of Dubai (CBD).
This article will explain what these rules are and how they impact your ability to use a bank in the UAE.
UAE has advanced banking system
- The UAE has an advanced banking system. The Central Bank of the United Arab Emirates (CBA) is in charge of setting rules for banks to follow and regulating their activities, including interest rates, fees, lending policies and customer protection.
There are 11 local banks in the country including Al Rayan Bank which is one of the largest financial institutions in UAE with total assets worth $5 billion USD as at 31 December 2016.
The CBA also regulates these banks through its licensing process so that they can operate legally within the UAE’s borders without violating any legal regulations or codes established by either government bodies or organizations.
11 local banks in the UAE
There are 11 local banks in the UAE.
- The largest ones are National Bank of Abu Dhabi (NBAD), its subsidiary NBAD Bank and Al-Rajhi Bank, which was founded by Sheikh Khalifa bin Zayed Al Nahyan, the president of the United Arab Emirates.
- Foreigners can open a bank account with these two banks but they do not have any financial power over them as they are owned by Emiratis who control their finances and policies.
Financial institution rules and regulations
The Central Bank of the UAE is the country’s central bank, and it regulates financial institutions.
- It sets rules and policies for banks, insurance companies and other financial institutions in order to ensure they operate within ethical standards.
- The bank is not subject to governmental oversight.
- It doesn’t rely on government funding or support from any other entity within the country or abroad (except if there are special circumstances).
National banks are owned by Emirati citizens
The UAE National Banks are owned by the government and not listed on any stock exchange. They provide a range of services, such as:
- Personal banking – This includes mortgages, loans, credit cards and insurance.
- Commercial banking – This is for business owners who want to open an account with their company name on it (or just use it as a personal bank account).
- International banking – If you’re planning to travel abroad or move overseas in the future then this is where you’ll need to go.
Foreign banks are owned by shareholders from other countries
Foreign banks are owned by shareholders from other countries.
- The largest shareholder of the United Arab Emirates’ banking system is the government, which owns 75% of all foreign bank shares.
- Foreign shareholders can be individuals or companies that want to invest in a local economy and get paid for doing so through dividends or interest payments that come from their investments.
- Some foreign banks are listed on stock exchanges around the world.
- Others have their own stock exchange market within their country’s borders (as is the case with Emirates NBD).
Foreign banks may be listed on a stock exchange market
- Foreign banks may be listed on a stock exchange market, as is the case with Emirates NBD, or unlisted, as with Mashreqbank.
The Dubai Financial Market is an independent depositary for securities issued by foreign firms domiciled in the United Arab Emirates and other countries that have signed agreements with UAE regulators to allow them to use local capital markets for their securities offerings.
The Central Bank of the UAE regulates the country’s banking system
The Central Bank of the UAE is responsible for regulating and safeguarding the country’s banking system. It sets rules and policies, manages currency issues and regulates licenses to banks.
Private and public banking institutions govern their own policies
You may be wondering how banks work in the UAE. You’re not alone. Many people are confused about how banking works in this country, even though it has been around for decades now.
The reason for this is that most people only think about the traditional banking system and don’t realize that there are other systems available as well.
In fact, there are two main types of banks: private and public.
- Private banks operate under their own policies
- Public ones follow the guidelines set forth by the Central Bank (the government agency responsible for regulating all financial institutions).
In the UAE, you can expect a high level of service
You can expect to be treated well by the bank staff. They will provide you with good advice and support, as well as security.
If you need assistance during the transaction process, there is a team of experienced professionals available at the branch location for your convenience. First Abu Dhabi Bank (FAB) uses advanced technologies to assist its customers such as internet banking through mobile apps and bank websites. FAB customers do FAB balance enquiry from their mobile phones by just logging in to the FAB mobile app.
Conclusion
The UAE’s banking system is one of the most advanced in the world. It has a very low inflation rate, which means that you can expect to earn more money over time than if you had invested elsewhere.