COVID-19: UAE’s largest bank says cash deposits only through ATMs
First Abu Dhabi Bank has suspended a number of banking services at its branches and contact centres including cash deposits as part of safety measures against coronavirus.
“Cash deposits will only be made through ATMs, with no coins allowed until further notice. We encourage you to make cash withdrawals through ATMs wherever possible. Cheque deposits are to be made through Smart Cash Deposit Machines and Cheque Drop Boxes. We kindly ask you to minimise visits to the branches where possible, and to use alternative banking channels,” the UAE’s largest lender said in a Covid-19 advisory on its website.
The services discounted by the UAE’s largest bank include funds transfer within the UAE, funds transfer to non-UAE banks, activating a new card, updating email address or mobile number, updating Emirates ID, requesting a new cheque book and downloading an e-statement.
“For customers, we recommend replacing visits to our branch or office with alternatives available to use remotely at home,” it said.
The UAE’s largest lender said its customers can access these services through its mobile or website.
“At First Abu Dhabi Bank, we are committed to ensuring the wellbeing of our employees and customers, and this remains a top priority for us. In line with the measures we are taking in response to the Covid-19 coronavirus, we have discontinued a number of banking services in our branches and contact centres,” it said in a statement on Wednesday.
The banks have been advising customers to avoid visiting branches and rather use digital platforms for banking transactions.
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Dubai set to take full control of DP world
Dubai has received commitments from a group of 10 banks for $9 billion in loans to take full control of port operator DP World and refinance debt of state investment vehicle Dubai World, sources told.
The debt transaction is one of the few deals keeping investment bankers busy in the Gulf as the global coronavirus outbreak slams the brakes on capital markets activity.
Dubai last month said that state company Port and Free Zone World, part of Dubai World, planned to buy publicly-listed shares of DP World in a deal with a $13.9 billion valuation.
Citi and Deutsche Bank underwrote $9 billion in loans for the transaction and immediately started talks with other banks to distribute the debt, sources told at the time. This week a group of 10 banks, including Citi and Deutsche, signed commitments that covered and oversubscribed the $9 billion debt deal, said two sources close to the deal.
The other eight banks are Bank of Nova Scotia, Credit Agricole, Emirates NBD, First Abu Dhabi Bank, HSBC, JPMorgan, Samba Financial Group and Standard Chartered, one of the sources said.
The transaction involves a $3 billion five-year loan, with the rest of the financing comprising shorter-term debt, the source said. DP World, Citi, Deutsche Bank, Emirates NBD, JPMorgan, and Standard Chartered declined to comment while the other banks and the Dubai department of finance did not immediately respond to requests for comment.
As part of the deal, DP World will borrow $5.15 billion to fund a dividend to Dubai World, which is the sole shareholder of Port and Free Zone World. The loans will be sold over the coming weeks to a wider group of banks, both sources said.
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COVID-19 in UAE: employer should pay salary if an employee is put in quarantine
The UAE-based companies that are asking their employees to be in quarantine after returning from leave are obliged to pay salaries for the days they are quarantined due to Covid-19, a legal expert has said.
“If the employer demands or calls upon an employee to be quarantined for certain number of days after he/she returns to the UAE from leave or official foreign tour, then the employer may be obligated to pay the salary for the number of days the employee has been quarantined, as the said leave is on the instructions of the employer,” said Ashish Mehta, founder and managing partner of Ashish Mehta and Associates.
“Based on this, the leave granted to the employee who has been quarantined for Covid-19 may be treated as sick leave and may come under the purview of Article 83 (2) of the Federal Law No. 8 of 1980 which states that employees has to be paid for the sick leave,” he added.
However, there are no specific guidelines or any ministerial orders issued by the Ministry of Human Resources and Emiratisation related to the payment of salary for the private sector employees who are quarantined for Covid-19.
A large number of companies have been asking their employees to be in quarantine when they return from leave. But if the employer refuses to pay salary to the employee who has been instructed to undergo quarantine by the employer, then it may be a violation of Article 83 of the Employment Law.
However, if the employees voluntarily quarantine themselves, they may not be eligible for sick leave salary. But if they are tested positive for Covid-19, then they may be eligible for sick leave salary.
Gunce Gurgur, head of human resources, Mercer, said for those returning from one of the high-risk countries listed by the World Health Organisation, the company is asking employees to work from home for 14 days to ensure they are symptom-free before returning to the office.
“As an extra precautionary measure, we are also requesting anyone who has returned from any other international travel to work from home for a minimum of five days upon return to the UAE,” said Gurgur.
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Indian rupee hits all-time low, touches 20.69 against UAE Dirham
The Indian rupee opened higher by 21 paise at 74.77 per dollar on Friday versus Thursday’s close 74.98. The rupee was trading at 20.42 against the UAE dirham, at 9:30 am (UAE time).
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.65 percent to 102.08, helping the rupee trade higher.
The domestic unit had closed at 75.12 against the US currency on Thursday.
Meanwhile, Indian stock indices slipped into the red after starting in positive terrain, with the BSE Sensex trading 23.79 points or 0.08 percent lower at 28,264.44; and the NSE Nifty was down 19.75 points or 0.24 percent at 8,243.70 in morning deals.
Investors continued to assess the impact of Covid-19 on the economy, impacting the trading sentiment on bourses.
Foreign investors remained net sellers in Indian capital markets as they pulled out more than Rs 4,622.93 crore on Thursday, market data showed.
Brent crude futures, the global oil benchmark, rose 2.25 percent to USD 29.11 per barrel.
The 10-year government bond yield was at 6.37 percent in morning trade.
The rupee may test 76.50 in the coming days and weeks, according to Abhishek Goenka, chief executive at India Forex Advisors.
“In such a risk-averse situation, when investors are unloading equities, bonds and currency, no level has any sanctity.”
Hitesh Jain, lead analyst at Yes Securities, said the rupee volatility will persist unless the adverse impact of the pandemic on the global financial markets abates.
“Though falling current account deficit – thanks to low oil prices – and stronger balance of payment is a positive for the rupee, markets are clearly positioned for a risk-off trade. We see rupee in the range of 74-76 for the next one to two months,” he pointed out.
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UAE best-positioned in GCC to absorb oil shock
The UAE is best-positioned among GCC economies to weather the decline in oil prices as it can finance its current account deficit longer than any of its regional peers, says a new report.
According to Capital Economics, the UAE can finance its current account deficit for 35 years if oil prices stay at $25 a barrel. Kuwait comes second followed by Qatar, Saudi Arabia, Bahrain and Oman.
“In the four largest Gulf economies – Saudi Arabia, the UAE, Kuwait and Qatar – current account deficits could be financed through a drawdown of large foreign exchange savings for a considerable amount of time. Saudi Arabia could do so for around a decade and the other three countries for even longer,” said Jason Tuvey, senior emerging markets economist at
Capital Economics. The report said the UAE still runs a current account surplus at $30 a barrel.
Brent crude was trading down $3.37, or 12 percent, at $25.35 a barrel by 1720GMT after dropping as low as $25.23, its weakest since 2003. US crude was down $5.19, or 19 percent, at $21.76. The session low was the lowest since March 2002.
Data showed that UAE-based sovereign wealth funds held over $1.21 trillion worth of assets in August 2019 compared to $825.76 billion by Saudi Arabia, $592 billion by Kuwait, $320 billion by Qatar and $22.14 billion by Kuwait.
Oil prices have plummeted over the last few weeks, firstly due to coronavirus and then the collapse of Opec+ talks on production cuts. Brent has dropped 45 percent in the past month from $57.60 a barrel on February 17 to $31.60 on March 17.
Tuvey noted that large foreign exchange savings provide substantial buffers and the likes of Bahrain and Oman, which are most vulnerable to a period of low oil prices, and can probably rely on financial support from their neighbours to avert devaluations.
He said dollar pegs in Bahrain and Oman are more vulnerable, with foreign exchange savings only able to cover current account shortfalls for a couple of years at most. Bahrain secured a $10 billion financing package from its neighbours in mid-2018.
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Central bank starts probe into UAE exchange centre operations
The Central Bank of UAE has launched an investigation into the operations of the embattled UAE Exchange Centre, which had temporarily stopped accepting new transactions a few days ago in the aftermath of troubles brewing at its holding company Finablr founded by the Indian entrepreneur BR Shetty in the midst of financial scandals related to NMC Healthcare, which was also founded by him.
In a statement, the CBUAE said its inspection team started an examination on the UAE Exchange on Wednesday, “in order to verify its compliance with the applicable laws and regulations. The Central Bank of UAE will take additional action, if necessary, once the examination is completed,” it added.
The apex bank said it will oversee operations management of the exchange, while “only its Wage Protection System will be allowed to operate until further notice.”
“In order to protect consumers, the Central Bank of UAE has required the exchange house to swiftly settle outstanding remittances and all other already initiated transactions,” the statement said.
The exchange house set up a committee of independent non-executive directors to carry out a comprehensive review of the company’s liquidity and cashflow management functions, its financial and debt position.
UAE Exchange, which has more than 9,000 employees across 800 offices in over 40 countries, said while new transactions would not be undertaken, all its customer service touchpoints and branches would remain open to support and attend to any queries customers may have
Finablr, the holding firm of currency-exchange businesses including UAE Exchange, Express Money and Travelex Holdings, which has beset by a ransomware attack, said on Monday that the Financial Conduct Authority of the London Stock Exchange has agreed to the temporary suspension of listing of its shares at the request of the company. In the midst of the worsening turmoil, Promoth Manghat, Finablr’s chief executive officer, also stepped down on Monday.
A Finablr statement, coinciding with the temporary suspension of its listing on the London Stock Exchange, said Promoth has agreed to continue to support the group while the board finds a suitable successor.
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An easy fix for rent problems
In a global crisis like the outbreak of Covid-19, startups in the region have bolstered their operations as most of them are tech-enabled and faster.
Kuwait-based Ajar – which started its operations in the UAE in late-2018 – are giving all tenants and landlords contactless, online payment solutions for free. Ajar’s agents will onboard them and send an online invoice for payment immediately or based on the due date – no service charges, no transaction fees.
Currently, over 35,000 residents use Ajar and under the current circumstances, landlords can also take advantage of the facilities like providing temporary discounts for tenants who cannot fulfill their rent payments, or cancelling or postponing rent payments as needed, and splitting the rent over several installments as required.
“We’ve noticed that a lot of property owners are finding ways to avail the pressure of payments on the tenants and we’re here to support that,” said Shaheen Al Khudhari, founder and chief executive officer of Ajar.
The company’s primary investors include Beco Capital and Sharq Ventures. It has so far raised $3 million and is at the pre-series A round.
“Our investors are more strategic partners than simply financial supporters. They have facilitated many market opportunities, providing us with strategic value through their global networks, investment portfolios and insights,” said Al Khudhari.
Ajar is the only platform in the region that currently allows landlords to manage and collect rent from both locally- and globally-located properties. For example, a property owner based in Dubai can collect rent for his property that’s based in Egypt, France or wherever.
Ajar’s platform offsets inevitable credit card fees with rewards that help tenants make back the money they spend on fees. Through the AjarRewards programme, the startup has partnered with companies across Kuwait and the UAE to give tenants discounts, cash-backs and more every time they pay their rent online. Rewards include everything from essentials like groceries, laundry, gifts and electronics.