The Dubai International Financial Centre (DIFC) is aiming to become a payment processing centre for banks and their customers. The announcement follows the introduction of a law to help make automated payments between parties in real time, the DIFC said in a statement yesterday. The first such law in the Gulf region, it paves the way for transaction processing at the DIFC for banks and their customers in Dubai and the wider Middle East.
The law will also help GCC-based companies to make and receive "legally sound payments" without having to use third parties that are often based outside the region and in different time zones. "The new system will execute all interbank transactions including cheques, credit cards, securities or shares, and it will be regulated by the Central Bank of the UAE," said Wissam Dagher, a senior associate with the law firm Habib al Mulla in Dubai.
The Central Bank had signed an initial agreement with the DIFC last June to prepare for the law's enactment. Dr Nasser Saidi, the chief economist at the DIFC, said the system would ensure payments went through. "Once the transaction is done it can't be revoked, which could have been a possibility under the old system," Dr Saidi said. Established in 2002, the DIFC is home to more than 800 investment banking, brokerage and advisory firms.
The centre offers 100 per cent business ownership, no tax on income and no restrictions on foreign exchange. "The enactment of the law forms part of a comprehensive infrastructure that DIFC is creating to catalyse the development of financial services industry in the region," Dr Omar bin Sulaiman, the Governor of the DIFC said. But the centre did not say when the service would be introduced. In developing this law, DIFC said it had adopted international legal best practices.
"These services are in line with more established European and Asian markets, and when introduced, firms in DIFC jurisdiction will have to apply to the authorities to avail of them," Mr Dagher said. skhan@thenational.ae