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The decision was issued after the eatery was found violating Law No. (2) of 2008 regarding food in the Emirate of Abu Dhabi and its associated legislation
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UAE Government Guarantees Bank Deposits
ABU DHABI/DUBAI - The federal cabinet has promised to guarantee bank deposits and protect banks from credit risks, as economies world-wide grapple with ways to contain fallout from the financial crisis.
The cabinet, which met on Sunday morning under the chairmanship of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, decided on a string of measures, including injecting liquidity if needed and facilitating interbank lending, the official news agency Wam said.
“The cabinet agreed to take several precautionary internal steps and measures, to guarantee continued economic growth and protect the national economy,” Wam said.
As part of these measures, the government has guaranteed that no national bank will be exposed to credit dangers. It will guarantee deposits and savings in national banks and provide guarantees on lending, including between banks operating in the country.
The President, His Highness Shaikh Khalifa bin Zayed Al Nahayan, also said in the statement following the Cabinet meeting that the UAE economy and financial sector remained strong, Wam said.
Shaikh Mohammed said that the government was serious about protecting the financial system and banking sector to preserve the country’s interests and those of its people.
His comments echoed those by the Governor of the Central Bank of the UAE, Sultan Nasser Al Suwaidi, who on Saturday said that the nation’s financial system was sound.
The Central Bank has already announced a bail-out package amounting to Dh50 billion, and has cut repurchase rates by 50 basis points, to inject more money into the inter-bank market.
According to the central bank’s latest figures, the financial sector exposure to the real estate industry was within safe territory at 11 per cent of total bank assets and 18 per cent of total deposits — well below a 20 per cent ceiling. Leading bankers and financial experts welcomed the cabinet’s move.
In a special programme on Dubai TV on Sunday night, Abdul Azeez Al Ghurair, CEO of Al-Mashreq Bank, Ahmed Humaid Al Tayer, Chairman of the Emirates National Bank of Dubai, Dr Omer bin Sulaiman, vice governor of the Central Bank, and Dr Nasir Al Saeidi, of Dubai International Financial Centre, agreed in a panel discussion that the measures would help boost the financial sector.
“These are historical decisions taken to protect our economy, even before any problems come to the surface. We congratulate the government for taking this courageous step,” Dr Omer said.
“Similar decisions taken by other countries around the world were taken after the problem became a reality, but here, it’s not more than precautionary measures, as our banking institutions are the safest in the world now,” he said.
Al Ghurair said the UAE economy was fundamentally strong. “The decision by the government to guarantee all bank deposits of all kinds, including bank-to-bank deposits, is a very wise decision that aims at assuring the public that our financial institutions are in good shape,” he said.
In a matter of two weeks, banks would produce their quarterly earnings results that would allay fears in some quarters about their financial health, Al Ghurair added. Al Tayer was optimistic about the current financial worries. “With crisis comes opportunities, and there are opportunities.
“In the few past years, banks in the UAE have doubled their size to become the biggest banking sector in the Arab World, and this is due to the confidence in the local market. The UAE is an exceptional case, we have swift solutions.”
Dr Nasir said Sunday’s measures would boost the bank sector, “which will regain trust and confidence in no time”.
He added the moves would have an immediate impact on the market, because financial institutions are now protected by the government, improving trust and confidence in the stock market.
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