The head of the country’s main banking group says many banks are not using the new credit reports from Al Etihad Credit Bureau.
Abdul Aziz Al Ghurair, chairman of the UAE Banks’ Federation, said they would not use the new credit scoring system to assess new lenders until it was confirmed who would be liable for inaccurate data in the reports – the bureau or the bank.
“They will not use it until the liability and responsibility for the information are clear,” The National reported him as saying.
The UAE Ministry of Finance must step in and clarify the situation, he added.
Banks must now hand over two years’ worth of data to the bureau, which has set up a federal and centralized system to assess the creditworthiness of individual borrowers.
It is based on what other loans and credit cards they have with any financial institution in the UAE and whether they have any defaults or bounced checks.
The bureau carries some 95 percent of all data on the 2.8m borrowing population as it tries to crack down on bad debt.
But it is optional for banks to decide whether to buy these reports from the bureau when assessing a new lending request.
A statement from the credit bureau read: “More than 30 subscribers, including banks and lending institutions within the UAE, are currently benefiting from the bureau services.
“All banks and financial institutions are welcome to utilize its services and those that do not may find themselves at a disadvantage in the long term. The bureau … recognizes that credit reporting is an evolving process internationally.”