The new banking law of the UAE is reportedly still "under preparation" and will be delayed until it is ready for implementation. The new law is designed to incorporate developments relating to the GCC monetary union with the Basel II requirements.
The Central Bank governor, Sultan Bin Nasser Al Suwaidi, said the delay was a result of changes taking place currently, according to <i>Gulf News</i>.
"The new banking law would be impacted by the implementation of Basel II, better corporate governance and the monetary union of the GCC. The law would be finalized after taking into account these considerations and their impact. So it would take time," he said.
Suwaidi added, "There are two or three issues remaining before a single GCC currency and a GCC monetary union are created. They relate to inflation and reserves."
He made the comments after signing an agreement on behalf of the UAE Central Bank with the International Finance Corporation (IFC).
An Advisory Agreement was signed by the two to support corporate governance reforms in the UAE's banking sector.
Suwaidi stressed the significance of corporate governance, saying that the Central Bank views the issue very seriously, as it is part of Basel II. "We want a mechanism to assure us that if Basel II is implemented well, corporate governance has to be followed seriously with a time table."
"We need to move ahead in our drive to improve the regulatory environment and in the best interests of shareholders and the reputation of banking in the country."