Big UAE banks ‘not using Al Etihad Credit Bureau reports’

'They will not use it until the liability and responsibility for the information are clear,' said UAE Banks' Federation chairman.

The newly-opened Al Etihad Credit Bureau in Abu Dhabi. Silvia Razgova / The National
Powered by automated translation

The head of the country’s main bankers’ group says big banks are not using a new system for checking creditworthiness because of confusion over liability for inaccurate data.

The Al Etihad Credit Bureau, which began issuing credit reports last week, now has more than 95 per cent of financial data on individual customers in its systems.

But banks have so far not used the reports – which include data provided by their competitors – to assess the creditworthiness of clients, said Abdul Aziz Al Ghurair, chairman of the UAE Banks’ Federation.

“They will not use it until the liability and responsibility for the information are clear,” he said.

The credit bureau is designed to strengthen the banking system against bad debt by individual customers and – eventually – corporates. Banks are obliged to hand over customer information to the credit bureau. But any bank seeking to use this pooled information in a credit report must obtain permission from the customer before so doing.

Mr Al Ghurair said it was the responsibility of the UAE Ministry of Finance to clarify the situation with regard to liability for any inaccurate data.

A statement from the credit bureau said: “More than 30 subscribers including banks and lending institutions within the UAE are currently benefiting from the bureau services.

“All banks and financial institutions are welcome to utilise its services and those that do not may find themselves at a disadvantage in the long term. The bureau is committed to the principle of fairness and equality in its operations. It welcomes feedback from all stakeholders and recognises that credit reporting is an evolving process internationally,” it added.

A senior lawyer who did not want to be named said: “It’s a bit strange for banks to be saying this, as although they have to seek customer consent, they’re obliged to provide this data under the terms of the federal law. They participated fully in the various consultations while the law was being drafted.”

fkane@thenational.ae

jeverington@thenational.ae Additional reporting by Mahmoud Kassem