(MEBG) – The central bank of UAE has issued an order requiring all national banks to plan a corporate standards manual, to form a credit committee of no less than five members, and to follow an applied administrative framework, reported Gulf News. The new measures must be in place no later than January 1, 2001.
The “corporate standards manual” is required so as to identify the authority and responsibility of the various departments, branches and divisions within the banks. It may also include staff behavioral standard regulations.
According to the central bank, the administrative structure is required as a means to increase safety. The credit committee will be responsible for the review, approval and recommendation of loans exceeding the value of 1 percent of the bank’s capital and reserves. The committee will also be accountable for reviewing settlements and writing-off appropriate cases.
The role of the bank’s chairman will be to direct board meetings, oversee that the execution of various decisions and operations are properly carried out, and discuss with board members matters relating to identifying bank policies and strategies. The chairman’s duty also includes verifying financial statements and statistics, as well as reviewing the CEO’s and his assistants’ banking activities and management.
The central bank demanded there be no overlap between the chairman and CEO positions, and prohibited board members from fulfilling managerial duties. Board members, the central bank said, are required to fully represent shareholders’ interests and well being, and should have independent views and contributions.
The central bank must approve the appointment of the banks’ chief executives and their assistants, department managers and branch managers, to confirm they are adequately qualified for the jobs they fill.
The role of the audit department is to verify that there is no overlapping of work functions, or conflict of interests. It must also notify management of significant changes, violations of laws and regulations, and inform the management and board of operations that may increase risks and losses for a bank.
