Banks recover to face the 1990s
THE banking industry in the United Arab Emirates has undergone many a crisis of confidence - not the least of which was the 1990 Gulf War - but it has emerged to face the 1990s with a new emphasis on service.
Only a decade before the war, it had been hit by the oil crisis when prices collapsed and the Iran-Iraq conflict was at it peak.
It was an unsettling period for depositors.
But swift government action effectively blocked what could have been a major blow.
Later, an Emirates Industrial Bank (a federal financial institution set up in 1983 to further industrialisation) study showed the Gulf crisis actually had minimal impact on the banking sector in 1990.
In fact, it found that the assets of 15 commercial banks had increased by four per cent.
Deposits increased nine per cent, loans five per cent and the net profits by nine per cent over the previous year.
Today, the UAE banking scene is expanding rapidly to prepare itself for the next century.
It was in response to the oil boom of the 1970s that banks were established all over the UAE.
Of the 179 locally incorporated commercial banks, 63 are in the emirate of Dubai.
Of the 119 foreign banks, 44 are also in Dubai.
The facilities are modern and up to international standards.
And, now, a high-level committee has been set up to study the feasibility of offshore banking.
Dubai even has its own ''Wall Street''.
The Khalid ibn Walid Street goes by this name because nearly a dozen banks and financial firms have set up there.
The hectic pace of construction in this area reflects the boom that is being witnessed by the banking business in Dubai.
Bankers are bullish about 1993, just as they were last year when profits soared to record levels.
The buzz words are electronic and consumer banking.
Emirates Bank International has launched its second investment scheme - called Income Note (I-Note) - hard on the heels of the success of its E-Bill plan.
The competition is stiff.
The Middle East Bank, part of the Emirates' Bank group, has launched a revolutionary interest-free auto-loan scheme in the hope of retaining its earlier share of the auto-loan market.
In this highly competitive environment, depositors are being wooed.
The marketing of consumer products and services by banks in Dubai is aggressive.
Local bankers believe this is the decade when the profile of the industry will undergo a radical transformation.
Banks are being converted to ''financial supermarkets'' catering to every individual whim.
Credit and debit cards, auto loans, securities and bonds - you name it, they market it.
Being ahead of the rest is the motto.
The drawing boards are perpetually being re-drawn with new products and services to entice the consumer.
Among the latest developments in the interbank network is the Emirates' Bank Faxline.
This is a daily customer information service covering exchange rates, interest rates, precious metal prices and other relevant indicators.
In fact, there is no need to go to the bank to organise deposits, pay bills or even check account balances.
It can all be done over the phone.
Customer service is seen as the key for banking's future.