Dubai: The UAE has approved the bylaws for the creation of a nationwide credit bureau that would help create a more robust credit environment in the country by allowing lenders to better establish the credit standing of borrowers.
His Highness Shaikh Mohammad bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, has issued Cabinet Resolution No. 16 of 2014 that paves the way for the official launch of the much-awaited Al Etihad Credit Bureau.
Al Etihad Credit Bureau was created by virtue of Federal Law No. 6 of 2010 which defined ways for requesting, gathering, preservation, analysis, categorization, use, circulation and protection of credit information and related information.
Its launch, slated for the first quarter of this year, was delayed due to delay in completion of collecting accurate credit data.
Until now, banks in the UAE have often been unable to access data on consumers at other financial institutions when making lending decisions.
As a result, borrowers could obtain money from many lenders and run up debts they sometimes could not repay.
Earlier this month, Marwan Lutfi, CEO of Etihad Credit Bureau said Al Etihad Credit Bureau has so far collected 22 to 24 months of data from around 70 credit data providers like financial institutions, telecommunication companies and various government bodies in the UAE.
Once the credit bureau is launched, everyone with a UAE ID card and who is part of the active credit population -- estimated at almost half the UAE inhabitants of some 10 million people -- will be part of this credit database.
According to the new bylaws, the entities that may request and obtain credit information are the federal and local entities, commercial banks, investment companies, leasing companies, financial institutes, commercial establishments, professional establishments, cooperative associations and offices and branches of foreign companies registered duly in the UAE.
Front companies shall not benefit from this Cabinet resolution.
According to the resolution, to obtain credit information, an applicant must apply to the credit information system, complete the application and abide by the rules and regulations of the Central Bank of the United Arab Emirates.
The application must include the applicant’s name and address, complete information about his commercial activities, name and address of the person under inquiry and a written approval from him.
The resolution stated that the credit information report includes any information regarding default payments or refusal to pay and any judicial decisions issued against the person.
The credit information report does not include the value of mortgaged assets, the person’s investments with the service provider, the credit rating for individuals and/or any consultation or any other information not requested by the applicant.
The credit information report covers the period specified by the applicant and this period should not exceed five years from the date of application.
The applicant must comply with any additional conditions required by Al Etihad Credit Bureau Company to improve performance or protect credit information.
The resolution prohibits collecting, registering, classifying, sharing, publishing or trading in any of the information included in the report or any personal information related to the individual.
According to the Cabinet Resolution, the applicant and the person whose credit information is being sought may complain against any mistakes or inaccuracies mentioned in the report by completing the appropriate forms and attaching supporting documents.
