Over two million of the 4.4 million people living in the UAE are still not operating through the country’s banking system, according to a senior government.
In a bid to tap this segment, Noor Islamic Bank and Emirates Post Holding Group will launch a Shariah-compliant company that will target people earning about $250 (Dh1,110) a month.
The yet-to-be named company will have a capital of Dh500 million and will focus on launching debit cards, Islamic insurance, credit cards, micro-financing, salary payments, remittances and currency exchange.
The joint venture will leverage Noor Islamic Bank’s expertise in the Shariah-compliant financial services arena and Emirates Post’s country-wide reach to offer a comprehensive basket of financial services.
A Cabinet decision was taken last year making it mandatory for all private companies to pay salaries and wages through banks to ensure workers are paid regularly and on time. The move was aimed to counter employers’ withholding or failing to pay wages, especially in the construction sector, the biggest employer in the country.
“There is a relatively high cost attached to the operation of these low cost accounts. But we can offer that service on a broader scale and not just as a bank along with Emirates Post,” Hussain Al Qemzi, Group Chief Executive Officer, Noor Islamic Bank, said.
The company, which expects to launch its services by end of the year, will operate initially through selected Emirates Post offices. It has 82 post offices throughout the UAE.
The bank will be looking to create a “parallel” system for this low-income banking, said Dr Ahmed Aljanahi, Deputy Group CEO, Noor Islamic Bank.
“This is just one of the many new ventures envisioned by Emirates Post Holding Group as we continue to pursue our goal of becoming a major player in the field of financial services,” Daboos added.
Noor looks to tap into low-income market