A direct debit system will be introduced across the United Arab Emirates (UAE) from 15 June, said the Central Bank of the UAE.
It added that the move is part of its strategic initiative to boost the efficiency of the UAE’s payment systems and the implementation of direct debit will enable customers to make regular, automatic payments from their bank accounts towards mortgage loans or credit card payments or personal loan instalments.
A statement from the bank described the introduction of a direct debit system as a step in the right direction towards increasing the efficiency of the country’s banking system, and elevating it in line with the global best practices, thus strengthening the UAE’s status as a global financial hub.
The facility is designed to eliminate the need to sign several post-dated cheques for instalments upon obtaining a loan/finance, allowing banks to reduce their reliance on post-dated cheques, it added.
“The benefit for account holders is that they can plan their expenses more efficiently. Also, the UAE federal government strategy requires adopting technology to enhance electronic systems and improve services to banking customers in the UAE,” the bank’s statement continued.
“Given our focus as a regulator we believe it is necessary to have a prudent, stronger and stable economy. Our current intention is to establish a more convenient retail banking system that will create more stable and progressive economic development.”
UAE Economic Growth
Separately, Bank of America Merrill Lynch (BoA Merrill) said that it expects the UAE economy to continue to grow at 4% in 2013.
In a research note, referring to official estimates, BoA Merrill said that the UAE Central Bank projected 4% economic growth in 2012 and 2013, noting that the official plan to spend Dirham (DH) 330bn over five years to increase oil production capacity could support hydrocarbon sector growth versus more pessimistic projections.
The note added that the UAE’s economic recovery is well entrenched and supportive global liquidity conditions are allowing Dubai to look past near-term maturities. Maturing restructured debt from 2015 onward is the key challenge, but there is little visibility and enough time for now.
“Dubai has shown its ability to grow again, with a respectable 4% pace easing deleveraging, and a perception that the real estate market has bottomed and in some segments seeing a V shape recovery,” BofA ML noted.
Global digital payment volumes continue to increase, with annual growth projected to top 10% percent for the first time to reach 426.3 ... read more
The T+2 Industry Steering Committee (T+2 ISC) has welcomed recent action by the Securities and Exchange Commission (SEC) to propose a rule ... read more
Data from Swift’s latest RMB tracker shows exceptional growth in RMB adoption in the United Arab Emirates (UAE), witnessing a 210.8% growth in payments value of the currency since August 2014, albeit from a low base.
SWIFT has announced that it has successfully completed the first phase of the global payments innovation (GPI) initiative pilot, clearing the way for the go-live of the service in early 2017.