UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance

Archive for March 15, 2010

Abu Dhabi in Pictures

Bank Deposits in the UAE

 

A cash deposit is repayable by the Bank on demand or in accordance with agreed terms.

The bank shall acquire ownership of the deposit and shall be entitled to use them for its own business but shall be obliged to return its equivalent to the depositer in the same currency as deposited.

A cash deposit shall be deemed to be a debt whereby an offset may be made between it and any debt due to the bank from the depositer and any agreement to the contrary shall be valid.

In the case of deposits meant for investment (with the aim of either securing an income or the refund of a greater sum at some future date), set-off shall not be exercised by the Bank against the indebtedness of the depositer unless such deposit is agreed to be held under lien by the bank or there is a court order to that effect.

Deposits and withdrawal shall bem ade at the bank branch where the account was opened unless otherwise agreed. 

If a depositer has several accounts with one bank or one branch of a bank, each account shall be deemed independent of the others, unless otherwise agreed.

The bank must forward account statements to the customer once a month, unless otherwise agreed.

*Emirates Institute for Banking and Financial Studies, Legal Environment in the United Arab Emirates, Laws Relating to Banking

Article 371 of the Commercial Transactions Law, Federal Law No. 18 of 1993  (the “Law”):

  1. A cash bank deposit is a contract according to which a person surrenders a sum of money by any means of payment to a bank ,which undertakes to return it upon request or in accordance with conditions agreed upon.
  2. The bank acquires title to the deposited money and shall have the right to dispose of it according to the requirements of its own acitivity and shall be committed to pay an equal amount to the depositer; however; the re-payment shall be made in the same kind of the deposited currency.

Article 372 of the Law:

  1. Money deposit shall be re-paid upon request unless otherwise agreed upon and the depositer shall at any time have the right to dispose of the balance or any part thereof.
  2. This right may be subject to prior notification or on the maturity of a specified period.

Article 373 of the Law:

Except for the deposit appropriated for investment, the cash deposit shall be considered a debt and may be set off against the debt owed to the bank by the depositer and any agreement to the contrary shall be considered null and void.

Article 374 of the Law:

If a bank issues a savings account book, it must in the name of the person in whose favor the book is issued, and must show the deposits and drawings.  The statements shown in the book and ssigned by the bank official shall be evidence in proving the statements contained therein between the bank and the person in whose favor the book is issued; and any agreement to the contrary shall be considered null and void.

Article 375 of the Law:

Depositing and drawing shall be made at the branch of the bank where the account is opened unless otherwise agreed.

Article 376 of the Law:

If a depositer’s accounts are several and with one bank or with one branch of a bank, each account shall be considered independent of the others unless otherwise agreed.

Article 377 of the Law:

Subject to the provisions of Article 391, the deposit contract shall not involve a depositer’s right to draw amounts from the bank in excess of what is deposited therein and if the bank has carried out operations causing the depositer’s balance to become debited, the bank shall notify him immediately in order to adjust his position.

Article 378 of the Law:

The bank shall send to the customer a statement of his accounts once a month unless otherwise agreed upon.

Article 379 of the Law:

The bank may open a joint deposit account for two or more persons equally among them unless otherwise agreed and the following provisions shall be observed in this account:  –

  1. A joint account shall be opened by its holders together or by one person carrying authorization issued by the holders of the joint account and attested by an official competent authority; however, the method of drawing from this account depends on the agreement of the account holders.
  2. If attachment is levied on the balance of one of the joint account holders, the attachment shall apply to the execution debtor’s share of the account balance, on the day of notifying the bank of the attachment; and in this case the equivalent to the attached share and shall inform the partners or whoever represents them of the levying of the attachment within a period not later than five days from the date it has been levied.
  3. Upon performing clearing among various accounts held by one of the account holders, the bank may not bring this account to clearing except with a written approval from the remaining partners.
  4. Upon death or loss of legal capacity of any of the joint account holders, the others should inform the bank within a period not exceeding ten days from the date of death or loss of capacity and the bank shall stop drawing from the joint account as of the date of notification until appointment of a successor.

Documents Required to apply for Dubai Chamber of Commerce Membership

 

 

Sole-Proprietorship Establishments

  1. Signature card signed by the licensee/attorney and sealed.
  2. Copy of the license.
  3. Valid passport copy of the licensee/attorney (if any) including the ID for UAE nationals.
  4. Copy of a duly attested powr of attorney for the attorney.
  5. For firms owned by foreigners: Copy of the Local Agent Agreement and Valid Passport Copy.

 

Local Companies

  1. Signature card signed by the manager/attorney (if any) and sealed.
  2. Copy of the license.
  3. Valid passport copy of the partners/attorney.
  4. Copy of the memorandum of association, notarized and attested.
  5.  Copy of a duly attested power of attorney for the attorney.

 

Foreign Companies and Representation Offices

  1. Signature card signed by the manager/attorney (if any) and sealed.
  2. Copy of the license.
  3. Valid passport copy of the manager/local agent or attorney (if any).
  4. Copy of the memorandum of association of the mother company notarized and attested.
  5. Copy of the Local Agent Agreement.

 

Free Zone Firms

  1. Signature card signed by the manager/attorney (if any) and sealed.
  2. Copy of the license.
  3. Valid passport copy of the manager/ attorney.
  4. Copy of the memorandum of association/share certificate/certificate of formation.
  5. Letter of authorization by the manager for the attorney.

 

The application fee is 2500 AED.

UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance