Development Bank to begin operations in 2010

A committee assigned to set up the Emirates Development Bank will complete its mission in three months, paving the way for the bank to begin operations from 2010, according to the Ministry of Finance.

Speaking to Emirates Business, Younis Haji Al Khouri, Director-General of the ministry, said: "The committee is now formulating the bank's administrative and organisational structure with the help of specialised global consultancy firms."

Earlier in January, the Ministerial Council for Services had approved the merger of the Real Estate Bank and the Industrial Bank into a single entity under the name of the Emirates Development Bank. And last month, the UAE Cabinet approved a federal draft bill for the establishment of the Emirates Development Bank with an initial capital of Dh10 billion, half of which will be provided by the government.

Al Khouri said the rights of shareholders in the Industrial Bank have been reviewed and an agreement has been reached with them to buy their stake. The other entity in the merger – the Real Estate Bank – is already owned by the government.

Al Khouri said there was no link between the global recession and the decision to set up the bank. He said the bank was important for supporting the country's financial sector and achieving developmental goals, especially in the industrial and real estate sectors. The bank would also support the diversification of income sources and the national economy as a whole.

The bank is expected to begin operations in 2010 and will provide UAE nationals with real estate and industrial finance. It will also support state housing programmes, and finance small and medium enterprises as well as big industrial projects, said Al Khouri.

On the possibility of expanding the bank's activities outside the UAE, he said: "The clauses of the bill establishing the bank allow for participation in developmental projects outside the UAE that are in the interests of the country and support the economies of friendly countries."

In the closing session of its 15th round three weeks ago, the Federal National Council had discussed the draft bill of the bank's establishment, which was referred to it by the financial and economic affairs committee.

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