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UAE banks take first step towards self regulation

Dubai: The UAE Banks Federation (UBF), the representative body of all banks operating in the country, yesterday adopted a code of conduct for its members.

The code aims to raise the professional standards of banking practice and to promote greater trust in the UAE banking industry. Banks operating in the country will have to adopt the Code within next six months.

“This is a move towards self-regulation of the banking industry. All elements in the code of conduct have come from within the banking industry and all CEOs representing the banking sector in the country believe that it will benefit, banks, customers and the society at large,” said Abdul Aziz Al Ghurair, Chairman of the UAE Banks Federation and CEO of Mashreq.

The code lists practices that should be followed by banks while serving customers, dealing in interbank transactions, market conduct, advertising, relations with regulator, recruitment and development of UAE national staff and the overall management of banks.

While the code is not legally binding on UAE Banks Federation members, it provides a set of benchmarks which all banks operating in the UAE market have committed to abide by. “It is a voluntary guideline and its objective is to increase awareness among banks, banking industry professionals and customers on what to expect from banks,” said Andre Sayegh, CEO of First Gulf Bank, who headed the specialised committee responsible for concluding the Code of Conduct.

The largest section of the Code covers conduct with customers. This sets out the commitment of member banks to treat customers fairly and openly and to manage complaints promptly and efficiently. It also provides for bank staff to be properly trained on the products offered by banks and their suitability for specific customers.

The Code also underlines the importance placed by banks on transparency in advising customers about interest rates and fees and other charges relating to products, and to ensure they are aware of the obligations they are undertaking in applying for such products.

“Although the Code of Conduct is voluntary in nature, we will take any breaches in their application very seriously and will seek remedial action from any member bank that is not meeting the standards set out in the Code,” Al Ghurair said.

While the Code will remain a dynamic document with possible amendments to meet the market conditions, the UBF plans to develop a website and social media platform to report customer feedback on banking services based on the Code of Conduct.