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The United Arab Emirates Federal National Council announced on May 19 that it had agreed on a bill guaranteeing bank deposits. The bill will be applied at a federal level, and will provide guarantees for deposits in the low-tax emirate Dubai. The proposed law, which must be approved by parliament, will cover the AED1.25 trillion (USD340bn) the nation currently safeguards.

In a statement, the UAE Central Bank noted that the bill will provide a boost to confidence in the financial sector, in turn bolstering the financial situation and attracting foreign capital to the nation’s banks. The law guarantees national financial establishments’ deposits for three years.

Announcing the bill, Obaid Humaid Al Tayer, UAE’s Minister of State for Financial Affairs said:

“There is an urgent need to approve the law as it is one of the procedures taken by the government to reduce the negative impact of world economic crisis which started six months ago, and more urgent and temporary laws will come soon to protect the financial system and national economy.”

The Central Bank included within its announcement that it is to provide further protection for employees via the launch of a new system to ensure the timely payment of employees’ salaries into their bank accounts from their employers. It is hoped that the new system, which includes the introduction of heavy penalties on non-compliant companies, will boost the country’s international image and add to the job market’s stability.