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Central bank plans to regulate outsourcing, financial bonuses

The Board of Directors of the UAE Central Bank reviewed some of the important projects currently being implemented at a meeting. — Supplied photo

The UAE Central Bank will introduce a series of new rules, next year to regulate outsourcing, Shariah banking and CEO’s financial bonuses under a comprehensive project to be carried out in year 2014.

At the meeting of the board of directors that took place the other day, the directors reviewed a list of some of the important projects currently being implemented and are expected to be completed during the next year.

Development of these projects will enhance performance and ensure conformity with international standards and best practices.

The board approved proposed regulations to be prepared or reviewed during 2014 in the area of supervision of banks and other financial institutions, such as outsourcing, disaster recovery, banks’ ceos bonuses, financial statements regulations and regulations regarding Shariah-compliant banking transactions besides others.

The central bank is planning to introduce financial services law (framework law), the new banking law and a new law regarding criminalisation of money laundering.

In the area of monetary policy instruments and reserve management, central bank is considering to introduce a discount window, a settlement system linked to securities custody and financial stability

Also, the central bank is working to launch a virtual banking system to link banks to it in order to facilitate the smart government on mobile phone and financial inclusion.

The board of directors also agreed the establishment of an Economic research department at the central bank along with the establishment of a risk monitoring unit.

The board also approved central bank’s 2014-2016 strategic plan and the central bank’s 2014 operational plan.

The board discussed re-printing of new quantities of currency notes of Dh100 and Dh50 denominations or to meet banks’ future demand.

The board reviewed a report on systemic prudential ratios for the banking system, banking stability, and liquidity indicators of the banking sector, submitted by monetary policy and financial stability department.

Furthermore, the board reviewed applications submitted by banks and other financial institutions operating in the UAE for extension of their activities and opening new branches. The board approved the applications that fulfill the terms and conditions as per the law and regulations applicable to each business activity.

In the sphere of banking supervision, the directors approved the project on the Implementation of the US Foreign Account Tax Compliance Act or FATCA under which US nationals will be subjected to disclosures with the US taxmen in line with the new law.

— haseeb@khaleejtimes.com