UAE to establish credit bureau to provide information for banks

A national credit bureau will be established and functioning this year in the United Arab Emirates (UAE) to help banks better manage their risks.

The bureau aims to improve screening of credit applications, thereby reducing bad debts, improving portfolio profitability and providing an economic barometer, the report said.

"The legislation is currently being considered by the concerned committee at the Ministry of Justice, and is expected to be passed by the cabinet of ministers very soon," Sultan Bin Nasser al- Suwaidi, governor of the UAE Central Bank was quoted as saying. The bureau will acquire 80 percent of its information database from banks, and will act as an information hub for banks in relation to their credit inquiries, he added.

Credit bureaus, which collects both positive information such as the level of current borrowing and existing credit limits, and negative information including late payments and defaults, help banks to avoid lending to reckless customers.