Federal credit bureau likely soon

Abu Dhabi: Sultan Bin Nasser Al Suwaidi, the governor of UAE's Central Bank, announced that a draft law is being finalised at the Ministry of Justice, establishing a federal credit bureau to function as a national credit data-sharing structure, to supervise the banks' lending policies.

"The draft law is being finalised by the concerned committee at the Ministry of Justice, as a final step before passing it to the cabinet for approval. Accordingly the credit bureau will be up and running within 2007," Al Suwaidi said.

Eligibility

"The central credit bureau seems to be the most appropriate solution for banks' aggressive lending, as it will result in streamlining credit activities for both banks and consumers," explained Jeremy Parish, Standard Chartered Bank's Chief Executive Officer, Abu Dhabi and Al Ain.

However, the criteria to be used in assessing credit eligibility has not yet been clarified, as the negative aspects of an individual or corporate credit history have proved to be less efficient compared to utilising the positive information.

"Many people manage to maintain a clean credit history, despite the fact that their borrowing exceeds their financial capacity, and if the bureau focuses on this type of information, complications might continue to exist," said Amr Shams, compliant officer at Commercial Bank International.