Bylaws for the setting up of a national credit bureau have been approved in the United Arab Emirates, Gulf News reports. The bureau will contribute to the creation of a stable credit environment in the UAE as it will allow lenders to better check borrowers' financial standing.
The long awaited Al Etihad Credit Bureau was created on the basis of Federal Law No. 6 of 2010, which set out ways for requesting, gathering, preservation, analysis, categorisation, use, circulation and protection of credit information. Cabinet Resolution No. 16 of 2014, which opens the way for the bureau's launch, was issued by His Highness Shaikh Mohammad bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai.
So far banks have not always been able to access data on customers at other financial institutions. This can result in borrowers easily obtaining money from many lenders and piling up debts they are unable to repay.
Gulf News quoted Al Etihad Credit Bureau's CEO Marwan Lutfi as saying that the bureau has already collected 22 to 24 months of data from about 70 credit data providers, including financial institutions, telecommunication companies and UAE government bodies.
When the Al Etihad Credit Bureau is launched, anyone who owns a UAE ID card and is part of the active credit population will be included in the credit database.
Federal and local bodies, commercial banks, financial institutes, investment and leasing companies, commercial establishments, professional establishments, offices and branches of foreign companies registered in the UAE are among the entities that will be able to request and receive credit information from the bureau, according to the new bylaws.