News / Business

UAE to monitor banks behavior

Monday, 25 May 2015 6:31 PM [ Last Update: Monday, 25 May 2015 6:31 PM ]

UAE Banks are under fire for not honoring proper business ethics.

The United Arab Emirates’ Banks Federation (UBF) has decided to set up an independent supervising organization to make sure that its banking rules and regulations are being followed by banks across the country.

The move was approved on Thursday by the bank Federation’s CEOs’ Advisory Council.

The monitoring agency would mainly operate under four committees that would watch fields of audit, operations and payments, IT, and fraud.

The banking industry body aims to crackdown on deceptive marketing as part of a new series of self-governing procedures.

“This comes in line with UBF’s diligence and continuous efforts to ensure that best practice is implemented by member banks in their dealings with their customers,” AbdulAziz Al Ghurair, Chairman of UAE Banks Federation, said.

File image of AbdulAziz Al Ghurair, Chairman of UAE Banks Federation

The move also comes, according to media reports, against the backdrop of increasing allegations of corruption within financial institutions including reports of insider trading.

“The creation of a marketing committee by the Federation and the commissioning of independent monitoring of advertising are tangible actions to reinforce observance of the Federation’s code of conduct, namely that member banks should seek to behave in a transparent and honest way in their marketing communications,” added Al Ghurair in the statement released by the UBF.

The profit that banks were making in the oil-rich Arab country from interest increased but at the expense of clients, meaning clients were hit with higher rates when they borrowed money from banks.

Going to other banks didn’t help customers either because banks were giving the same deals across the country.

HDS/HA

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