Daily Personal Finance Insights – UAE money laws

Daily Personal Finance Insights – UAE money laws
17 March 2013

Microcredit platform Pi Slice launched in Dubai

Dubai-based microfinance funding platform, Pi Slice, has officially launched its operations enabling individuals and companies to lend to Mena-based microfinance institutions (MFIs).

Pi Slice empowers micro-entrepreneurs, who are otherwise excluded from access to credit by formal banking institutions, to start and grow businesses, engage in income-generating activities, and thereby transform their own lives as well as those of others by becoming job creators rather than job seekers. By giving a small online loan, a lender can provide aspiring entrepreneurs with a life-altering opportunity to overcome poverty.

Central Bank to take action on policies

The UAE Central Bank must act this year to push forward previously issued rules and policies according to Saeed Abdulla Al Hamiz, Assistant Central Bank Governor for banking supervision.

In January, the Central Bank said it would not enforce curbs on residential mortgage loans as a proportion of property values that it had set three weeks earlier. Last year it announced rules limiting banks' exposure to state-linked borrowers, and rules requiring them to hold a certain ratio of their assets in the form of liquid instruments; both initiatives were suspended in December after discussions with banks. Hamiz said the Central Bank was still discussing the rule on exposure to state debt with commercial banks: “We are discussing it with the industry and we will see. I think it is important that we do not delay it.”

Dubai looking to issue franchising law

Dubai Chamber of Commerce and Industry organised a workshop with leading legal firms to develop a franchising law. There is currently no law for franchising in the UAE, although from a legal perspective, the absence of specific provisions governing franchise agreements in the UAE are subject to civil and commercial laws, specifically the Commercial Agencies Law, the Commercial Transactions Law and the Civil Transactions Law.

A new law governing franchise agreements is expected to boost the availability of franchises in the UAE.

Maternity (and paternity) leave in the UAE

Under Article 33 of the Labour Law, women are only granted 45 days of fully paid maternity leave after a period of continuous employment of one year. If they have not completed one year of service, they are eligible for 45 days maternity leave on half pay.

Article 33 does not clearly specify whether the 45 days maternity leave are calendar days or working days, however, it has been widely interpreted and applied under the law as being calendar days. New mothers may extend their maternity leave with additional unpaid leave up to 100 consecutive or interrupted days if they can prove they have a medical condition preventing them from returning to work evidenced by a medical report. Maternity leave and any additional leave for this purpose should not be counted as part of normal leave such as annual leave, sick leave and unpaid leave.

In the public sector paternity leave has been legally recognised and enforced. Fathers currently receive paternity leave of three consecutive working days during the first month of the child's birth. In the private sector paternity leave depends upon the individual contracts.

The UAE’s maternity leave allowance is the lowest in the world, being more than 50% lower than the global standard set by the International Labour Organization, according to UN statistics.

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Head of Behavioral Finance
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