No plans to issue new bank licenses in near future

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Dubai, A senior official of the United Arab Emirates (UAE) said that no new bank license would be issued to any financial company in the near future.

"We have no plans to issue any new bank licenses in the near future. There have been a number of applications, but as far as the central bank policy on issuing new bank licenses is concerned, we will continue to maintain the status quo," Sultan Bin Nasser Al Suwaidi, Governor of the UAE Central Bank, was quoted as saying.

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 license applications from companies seeking licenses will get the same treatment," Al Suwaidi said, in a specific reference to applications from two Islamic mortgage lenders.

"It is the current central bank policy not to issue new licenses to finance companies and the policy will be applicable to all," he added.

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.

The UAE has 49 banks including national, regional and foreign banks. The UAE Central Bank issued three licenses in 2006.

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