News Column

Banks should desist from offering risky credit

January 24, 2014

Gulf News

A senior official with the UAE government, Ahmad Juma Al Za'abi the Deputy Minister of President Affairs has said that some banks are attempting to flout Central Bank rules by continuing to offer unsecured personal and business loans to Emiratis. This loan practice flies in the face of a UAE policy whereby the loans of Emiratis in fiscal difficulty are settled by the Nationals' Defaulted Debts Settlement Fund . This fund was established on orders of President His Highness Shaikh Khalifa Bin Zayed Al Nahyan in January 2012 and Al Za'abi is the chairman of the fund and oversees it reaching out-of-court settlements to assist Emiratis. While Al Za 'abi's comments are worthy of note and certainly he has a point what is indicative of this entire process is the lack of a centralised credit bureau. The lessons of the past five years have shown us just how quickly finances can deteriorate. The Credit Bureau is in the process of being set up and it can't come soon enough. The bureau will have the ability to ensure that all credit applications are vetted thoroughly. The days of irresponsible lending and borrowing should be long over.

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Source: Gulf News (United Arab Emirates)

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