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Banking
At
this time of growing prosperity, a leading group of
merchants including Ali Bin Abdullah Al Owais, the
father of the late Chairman of the National Bank of
Dubai Bank, Sultan Ali Al Owais came forward with a
proposal to the
Ruler of Dubai, His Highness Sheikh Rashid Bin Saeed
Al Maktoum. It
was for the formation of the first national bank that would play a vital role in developing Dubai
into a leading business centre.
A Decree,
issued by H
H Sheikh Rashid bin Saeed Al Maktoum
in 1963, saw the opening of the National Bank of Dubai.
Dubai’s
banking sector has taken huge strides since then. It gave tremendous boost to trading
and other commercial activities.
The success of the first bank gave
inspiration to several other banks, local as well as
international, to operate in Dubai.
The
regulatory authority since 1980 has been the UAE
Central Bank. Some 47 commercial banks operate, with
a total of around 350 branches, of which about 28
are foreign banks with a combined total of more than
200 branches. Federal law restricts foreign banks to
no more than eight branches each.
Federal law
also requires that every commercial bank must have a
paid-up capital of at least Dh 40 million. There are
also a number of
investment or merchant banks operating at present in
Dubai.
For medium-term or
long-term industrial finance, local companies can
approach the Emirates Industrial Bank, set up by the
UAE government with an initial capital of Dh 500
million. Its main objective is to help develop the
private sector.
Bill discounting , Import and export financing can be arranged
through the commercial banks either foreign or locally owned. Leasing and
hire purchase are available from local finance
companies specialising in this business.
Margins
or commissions are charged by the banks for services
rendered. But
this is highly flexible.
The rates are dependent on the relationships
with the customers.
Dubai is ideally placed
at the heart of the World's richest regions.
It
offers a highly developed business
infrastructure which matches international standards
anywhere, and provides an open, accessible and
diversified market.
Selected Economic Indicators, 1994 to 1999
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Economy
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1994
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1995
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1996
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1997
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1998
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1999
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GDP in current prices (billion Dirhams)
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141.9
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156.9
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175.8
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184.5
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173.1
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190.5
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GDP growth rate (%)
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6.53
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10.57
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12.03
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2.76
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5.85
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10.00
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Inflation (estimated %)
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4-5
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4-5
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3-4
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2-3
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1.5-2
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1.5-2
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Business
Hours
Banks, private companies and
shops open Saturday to Wednesday from 8 am or 9 am
to 1 or 1.30 pm and reopen in the afternoon from 4pm
to 7 or 8 pm. Shops may or may not be open on
Thursday afternoon. The larger shopping centres and
supermarkets in Abu Dhabi and Dubai will stay open
until 9 or 10 pm. every night. But everything is
closed during the day on Friday though some shops
may open on Friday evenings. Friday is a day of religious significance and is
like Sunday in Christian countries. During the month
of Ramadan business activity is less brisk in
the day time. There
are special timings for commercial
establishments working late hours at night
during these days.
Currency
& Costs
Local
currency is the UAE dirham.
It is pegged with the US Dollar
at 3.675 Dirhams per dollar.
Moneychangers
are a familiar site every where in the Middle East. They offer better rates in comparison with hotels or banks, though some
of them may not take Travellers Cheques or will take
only of some specific type.
ATMs (or automatic teller machines) have
become widespread in UAE. The best currencies to
take to the UAE are US dollars or British pounds.
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The Creek,