With new rules for money exchanges, it's become a lot safer to send your money home from the UAE
Recent measures have been taken in the wake of a collapse of an exchange firm (Image credit: emirates247.com)
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Khaleej Times spoke to leading stakeholders, who welcomed the Central Bank of the UAE’s new rules, which will make sure that the firms dealing in cash had enough financial means to sail through in times of crisis.
Dr B.R. Shetty, managing director of the UAE Exchange, welcomed the new rules, which will allow only professionally run firms to survive.
“With the higher capital requirement, the customers may not suffer at the hands of a financially weak or technically incapable money exchanges,” he said.
Now the Central Bank will interview the officials who will manage the exchange company, which must be lauded, as only highly capable professionals will be allowed to run such businesses, he said.
Jitendra Gianchandani, chairman, Jitendra Consulting Group, said the move was part of government strategy to regularize the sector.
“New rules will enhance the general public’s confidence, as their money will be handled by financially sound firms,” said Arbab Ali Narejo, the general manager of Abu Dhabi based National Exchange Company. He said that the Central Bank of the UAE has taken right measures in order to groom the exchange firms on modern lines, and beef up their operations.
The exchange firms’ setup on partnership basis had no minimum capital requirements, due to which several firms had been set with small capital. And since the business has grown manifold in recent years to wire transfers, buying/selling in currencies and Wages Payment System or WFS, there was need to increase the capital, in accordance with the expansion in business volumes, Narejo said.
The general manager said an LLC setup to carry out exchange business must have 100 per cent bank guarantee to equal minimum capital of Dh50 million, in previous rules, the bank guarantee was 50 per cent of the capital.
All these measures have been taken after the recent collapse of an exchange firm whose employees misappropriated the funds of the wages payment system account and the company had not enough capital to pay the claims, he said the new rules will address this issue in the future.
With the new rules and emphasis on higher capital, there was enough cushion against such an eventuality, the general manager said.
For each of the new branch opened, the exchange company has to increase its capital by ten per cent, he said, which was a good measure, as the expansion would commensurate with their capital.
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