Standard Chartered tells thousands of UAE firms it's shutting their accounts
Exit meets deadline of New York regulator that fined bank for risky transactions
Standard Chartered said it would exit part of its small and medium-sized enterprises (SME) business in the United Arab Emirates, leading to the closure of thousands of accounts there.
The UK-based bank's move comes after a New York regulator fined the bank US$300 million in August for failing to flag high-risk transactions in the UAE and Hong Kong.
At the time, the regulator gave the bank 90 days to exit its high-risk SME business in the UAE.
The closure of accounts in the UAE did not foreshadow the shutting down of SME accounts in Hong Kong, analysts said, as the regulations that Standard Chartered must comply with in the UAE were tougher than in Hong Kong.
Standard Chartered would exit businesses in the UAE "where increased regulatory costs could undermine their economic viability", it said in a statement.
Thousands of customers in the UAE had been notified that their accounts would be closed in 30 days, Reuters reported yesterday, drawing complaints that the bank did not give sufficient warning.