The Arab Bank for Investment and Foreign Trade (ARBIFT) will open labour offices at the Ministry of Labour and Social Affairs in Sharjah and Al Ain to reduce fees levied by banks on guarantee deposits.

In accordance with Cabinet decision No. 14 for 2001 all private companies have to obtain letters of bank guarantees to qualify for a work permit.

Sources at the Ministry of Labour told Gulf News yesterday that some banks were asking more than Dh600 for the guarantees.

The sources added: "The ministry is still receiving complaints from companies that many banks are asking for large sums of money to issue letters of bank guarantees."

An agreement was signed previously with the Ministry of Finance and Industry under which Arbift has agreed to issue letters of bank guarantees for a fee of Dh100.

The bank has established branches in Abu Dhabi and Dubai and will establish more branches to ensure strict control by the two ministries over banking guarantees and reduce fees levied by the banks on guarantee deposits.

Earlier, Khalifa bin Saif Al Muhairi, Director of Sharjah Labour Office, said the process of paying bank guarantees will become smoother with the opening of an e-guarantee section at the Sharjah Labour Office.

He said the new section will be of immense benefit to private companies and other employers, who are required by law to deposit a bank guarantee of Dh3,000 for each worker, in order to protect the rights of the workers and reduce the number of labour disputes.