Gross banks’ assets in UAE stand at Dhs3,442.7 billion in end of May

The Central Bank of the UAE (CBUAE) has announced that the gross banks’ assets, including bankers’ acceptances, rose to Dhs3,442.7 billion at the end of May 2022, an increase of 2.9 per cent, compared to Dhs3.44.8 billion at the end of April 2022.

In its report on the Monetary & Banking Developments for May 2022, CBUAE clarified that the gross credit grew by 2.6 per cent rising from Dhs1,817.4 billion at the end of April 2022 to Dhs1,865.5 billion at the end of May 2022. Gross Credit rose due to 3.0 per cent increase in Domestic Credit, overriding the 0.1 percent reduction in Foreign Credit.

Domestic Credit mounted mainly due to 1.4 percent, 1.3 percent, 3.5 percent and 16.9 percent surges in credit to Government Sector, Public Sector (Government Related Entities), Private Sector and Non-Banking Financial Institutions, respectively.

Total Bank Deposits increased by 1.6 percent, climbing from Dhs2,008.4 billion at the end of April 2022 to Dhs2,040.5 billion at the end of May 2022. The growth in Total Bank Deposits was due to the ascent in Resident Deposits by 2.0 percent, overshadowing the reduction in Non-Resident Deposits by 1.2 per cent.

Resident Deposits increased owing to 10.6 percent, 6.1 percent and 0.02 percent escalations in Government Sector Deposits, Public Sector (Government Related Entities) Deposits and Private Sector Deposits, respectively. On the other hand, Non-Banking Financial Institutions Deposits diminished by 18.0 per cent.

The Central Bank also said that the Money Supply aggregate M1 decreased by 2.8 per cent, from Dhs730.4 billion at the end of April 2022 to Dhs710.1 billion at the end of May 2022. The fall was due to Dhs4.6 billion reduction in Currency in Circulation Outside Banks and Dhs15.7 billion decrease in Monetary Deposits.

The Money Supply aggregate M2 (that includes M1 + Quasi-Monetary Deposits) increased by 0.1 percent, from Dhs1,567.3 billion at the end of April 2022 to Dhs1,568.1 billion at the end of May 2022. M2 rose due to Dhs21.1 billion increase in Quasi-Monetary Deposits, overriding the drop in M1.

The Money Supply aggregate M3 (that includes M2 + Government Deposits) also rose by 1.7 percent, from Dhs1,858.6 billion at the end of April 2022 to Dhs1,890.2 billion at the end of May 2022. M3 soared due to the elevated M2, boasted by Dhs30.8 billion growth in Government Deposits.

The Central Bank of the UAE (CBUAE) has issued a new guidance on anti-money laundering and combatting the financing of terrorism (AML/CFT) for its licensed financial institutions (LFIs) on the risks related to payments.

The guidance, which comes into effect today, will assist LFIs’ understanding of risks and effective implementation of their statutory AML/CFT obligations, and takes Financial Action Task Force (FATF) standards into account.

It requires LFIs to demonstrate compliance with its requirements within one month.

The guidance focuses on the money laundering and the financing of terrorism risks relating to payments and preventive measures that LFIs should apply in order to mitigate such risks. As new payment products and services might bring risks to the financial system because of the rapid movement of funds between payment participants and across borders, and LFIs might be exposed to participants licensed by the CBUAE and those operating globally, LFIs should take a risk-based approach to mitigate and manage money laundering and the financing of terrorism risks.

They should conduct a regular risk assessment to cover all the payment products, services, relationships and exposure to domestic and foreign payment sector participants.

LFIs are responsible for conducting due diligence on customers, monitoring all transactions processed or conducted through the LFIs and reporting suspicious transactions to the UAE’s Financial Intelligence Unit. They should also have sanctions compliance programme with operational systems that appropriately screen transactions and transmit required information throughout the payment cycle.

In correspondent relationships, LFIs should not process any payments for a correspondent unless they are entirely confident that the correspondent conducts appropriate screening. These preventive measures should be integrated into an LFI’s AML/CFT compliance programme and supported with governance and training.

Khalid Mohammed Balama, Governor of CBUAE, said, “We are committed to implementing high regulatory control over LFIs and their payment operations, including products, services and exposure. The new guidance ensures that all LFIs in the UAE understand their AML/CFT responsibilities.”

Meanwhile, the United Arab Emirates, represented by the Ministry of Finance (MoF) as the issuer, in collaboration with the Central Bank of the UAE (CBUAE) as the issuing and paying agent, has announced the results of the third auction of the Treasury Bonds programme (T-Bonds), which is part of the AED9 billion T-Bond issuance programme for 2022 as published in the T-Bonds calendar earlier this year.

The third auction of the UAE T-Bond programme witnessed a strong demand through the six primary bank dealers, with bids received worth AED7.6 billion, and an oversubscription by 5.1x. The strong demand was across both tranches with a final allocation of AED750 million for the 2 year tranche and AED750 million for the 3 year tranche, with a total of AED1.5 billion issued in the third auction.