The UAE’s money exchange houses are reportedly holding talks with the central bank about new capital requirements.
Under new guidelines that came into effect on January 1, companies are required to hold at least Dhs 5m if they offer remittance services, up from Dhs 2m previously.
Companies handling wage payments are required to hold Dhs 10m.
Another new rule stated that the paid-up capital of exchange houses should be raised by 10 per cent for each additional branch, but it has been delayed until the end of Q2 due to confusion about the requirements, according to Reuters.
Foreign Exchange and Remittance Group chairman Osama al Rahma told the newswire the group was seeking clarification on whether the 10 per cent increase was based on capital under old rules or new rules.
“We need a balance between the growth in the number of branches which has to take place and the capital requirements, so that we allow business to grow and at the same time don’t burden the business with unnecessary financial requirements,” he said.
The central bank has been tightening rules for the exchange industry to try to combat money laundering.
Dubai is the regional centre for foreign exchange, sending large amount of money from the Middle East to Asia and parts of Europe.