Banking in the UAE

Commercial banking services in UAE is offered by a bunch of locally established banks and branches of foreign banks. The local banks are basically public share holding companies which are licensed under the union law (1980). All the branches of foreign bank have the license from the central bank to operate in UAE. A few of the foreign banks have their representative offices within UAE to assist and guide their customers in administrative process.

Under the union law (10) of 1980 investment banks are the trust company which does not accept funds whose maturity is less than 2 years. They may however borrow the funds from their head office, local, foreign banks or financial markets.

All the purchase and sale of stocks (domestic and foreign), currencies, commodities and bonds are regulated by the board of directors of central bank. They also have power over intermediating in money market transactions. Resolution No. 126/5/95 states that in case of a natural person presiding as an intermediary then it must a UAE citizen. If it is a company then they should have national shareholding of a minimum of 60% of the total capital.

The Islamic banks in UAE are governed by sharia law and federal law no.6 of 1985. According to the laws the Islamic bank can operate on any part of banking be it commercial, investment services or financial.