Dubai: Some money changers in UAE are appealing a recent decision by the Central Bank to prohibit them from doing remittance transactions.
UAE resident have been advised that they can no longer transfer money or receive salaries through at least seven exchange houses.
The UAE Central Bank confirmed on Monday that Taher Exchange Est., Al Hadha Exchange, Al Hemriya Exchange Company, Dubai Express Exchange, Sanna Exchange, Cosmos Exchange and Bin Bakheet Exchange can no longer conduct “any activities relating to remittances or payment of wages.”
The licences of the said outlets were downgraded and they’re now allowed to deal only in the sale and purchase of foreign currencies and travellers’ cheques.
The decision stemmed from the failure of the exchange houses to comply with the central bank requirements, including regulations against illicit financial transactions.
The move has impacted the operators, with the remittance transactions being a major source of business revenue.
“We are losing 50 money transfer transactions a day at one outlet alone and now we have to turn down our regular customers,” said a source of one outlet, which deals mainly with Indian, South African, Bangladeshi and Filipino customers.
Exchange houses in UAE were earlier instructed to improve their standards, after a number of banks stopped dealing with them due to concerns about money laundering.
A significant number of expatriates send money to their home countries every month and the biggest remitters among them are Indians, who transferred Dh14.8 billion from UAE in the last quarter of 2017.
Pakistani nationals are the second-biggest source of remittances, which reached Dh4.1 billion, followed by Filipino expats who moved Dh3.1 billion in cash.
A source at Dubai Express Exchange said they have recently filed an appeal asking the central bank to reverse its decision and allow them to handle remittance transactions, citing that they have already fixed their compliance failures and strengthened controls to combat anti-money laundering.
“We stopped offering the service since we received the notice last April 12 from the authorities, but whatever compliance issue that we failed to meet has already been addressed. Now, everything is in order from our side. We’ve even invested in two new software for monitoring transactions,” the source told Gulf News.
In a statement, the central bank said the exchange houses failed to “regularize their status during the grace period granted” to them. “[The exchange outlets] were prohibited from conducting any activities relating to remittances or payment of wages.”
It pointed out that “it will not tolerate violations of financial institutions to its regulations and instructions.”