Dubai: The UAE central bank has no plans to issue bank licences to finance companies in the near future, Sultan Bin Nasser Al Suwaidi, Governor of the UAE Central Bank, told Gulf News yesterday.
"We have no plans to issue any new bank licences in the near future. There have been a number of applications, but as far as the central bank policy on issuing new bank licences is concerned, we will continue to maintain the status quo," Al Suwaidi said.
The UAE has 49 banks including national, regional and foreign banks. The UAE Central Bank issued three licences last year.
In a specific reference to banking licence applications from Islamic mortgage lenders Amlak and Tamweel, the central bank governor said that all licence applications are treated equally, and thus the central bank policy will be applicable to these companies too.
"We have no preference for any particular class of companies, whether Islamic or conventional. All licence applications from companies seeking licences will get the same treatment. It is the current central bank policy not to issue new licences to fin-ance companies and the policy will be applicable to all," Al Suwaidi said.
Although Amlak's application was turned down by the central bank earlier this month, some company officials had hinted recently that the application is still live and the Islamic mortgage lender is still pursing the banking licence with the central bank.
With the central bank making its position clear, Amlak and Tamweel's hopes of getting a banking licence have come to naught.
In the absence of banking licences, these two companies are forced to raise funds through alternative sources including asset-backed securities, capital markets, inter-bank borrowing, real estate funds, corporate deposits as well as rights issues.
"Tamweel has a well diversified funding base. In addition to sukuk issues we are working on frequent securitisation issues that will supply us with adequate long term funds. As far as a banking licence is concerned we do not believe that it will make any major difference to our business," said Adel Al Shirawi, CEO of Tamweel.