TheBusinessWeekly n 29 June 2008 n 21
banking&finance
Central Bank to be lead regulator on RAPID
Sultan Bin Nasser Al Suwaidi
Enters into
agreement
with DIFC
TBW Bureau
The Dubai International Finan-
cial Centre (DIFC) has signed a
Memorandum of Understanding
(MoU) with the Central Bank of
the UAE (CBUAE) under which
the latter becomes the lead regu-
lator for Real-time Automated
Payments in DIFC (RAPID).
RAPID is a DIFC initiative to
provide a real-time gross settle-
ment (RTGS) payment systems
infrastructure from within the
Financial services benefit from credit crunch
Assets easier to buy,
human capital grows
Jim Paolo Joquico
The Middle East’s financial serv-
ices sector has stood to benefit
from the current economic crisis
in the West, a top company offi-
cial of a global financial consult-
ing firm said. He mentioned that
instead of being affected nega-
tively by the credit crunch with
some of the Gulf Co-operation
Council (GCC) countries’ curren-
cies pegged to the US dollar, the
crisis has brought with it some
positive effects.
Speaking to The Business
Weekly, Julien Faye, partner for
Financial Service and Private
Equity at Bain & Company Mid-
dle East, a US-headquartered,
market-leading global business
consulting firm serving clients
TBW June 29 (b).indd 21
DIFC to financial institutions
operating within the centre and
throughout the wider region.
Sultan Bin Nasser Al-Suwai-
di, governor of the CBUAE, said,
“As a pioneering system that will
greatly benefit those doing busi-
ness, RAPID looks set to revolu-
tionise payment methods at the
region’s leading financial centre.
The CBUAE is committed to en-
suring the reliability and integ-
rity of all financial products and
services available within the re-
gion and it is with great pleasure
that we enter into this strategic
alliance to actively ensure that
RAPID complies with all of the
regulations placed upon it.”
World-class infrastucture
Dr Omar Bin Sulaiman, gov-
ernor of the DIFC, said, “By es-
tablishing RAPID, the DIFC is
once again reaffirming its com-
mitment to providing a compre-
hensive world-class financial
infrastructure to encourage the
development of the financial sec-
tor in the Middle East. As the
world’s fastest growing financial
Julien Faye
on issues of strategy, operations,
organisation and mergers and
acquisitions, said, “First of all,
growth has not been impacted,
both for our clients and for our
own business operations. Also,
there is a lot of investment oppor-
tunities that didn’t exist three or
four years ago for our clients, ba-
sically, because of an imbalance
centre and a hub for finance in
the region, the DIFC recognises
its responsibility to provide the
latest, most innovative products
and services to drive the growth
of the banking and finance in-
dustry. We are delighted that the
CBUAE will govern the payment
systems implemented by RAPID
and we look forward to the posi-
tive impact that RAPID will have
on business in the DIFC and the
region.”
As part of the agreement, the
CBUAE becomes the lead regu-
lator for the payment systems
implemented at RAPID and has
ultimate responsibility to ensure
that RAPID complies with the
Core Principles for Systemically
Important Payment Systems (CP-
SIPS) as issued by the bank for
International Settlements (BIS).
As the lead regulator of RAP-
ID, the CBUAE’s overall respon-
sibility is to ensure that RAPID’s
payment systems and the regu-
latory regime for RAPID comply
with CPSIPS. This will be under-
taken by an initial and periodic
assessment of RAPID against the
between US investors and local
investors, creating liquidity and
access to more cash.”
Trigger for expansion
Apart from the emergence of
new opportunities for investors,
Faye pointed out that the crisis
has initiated a good occasion for
international expansion of com-
panies.
“There is a major window of
investment opportunities for cli-
ents from the GCC and Egypt to
invest and to grow. Now is the
moment to think about expand-
ing internationally, from being
a local business to becoming a
regional or global commercial in-
stitution. It is now easier to buy
assets and companies because of
the US credit crunch,” he added.
Economies in the Middle East
will also witness a positive effect
in terms of developing human
capital in the region, with the
economic recession causing the
Omar Bin Sulaiman
CPSIPS criteria and other inter-
national best practices. DIFC will
undertake all steps to establish
and maintain RAPID legally and
commercially.
The DIFC will have the re-
sponsibility for establishing and
maintaining appropriate gov-
ernance powers and structures
in compliance with CPSIPS and
other best practices, so as to en-
sure that the RAPID has suffi-
cient independence and clarity in
its role and structure to conform
with CPSIPS and other interna-
tional best practices.
The CBUAE will also under-
take a series of other regulatory
steps as appear reasonable and
necessary to regulate RAPID.
influx of highly-qualified profes-
sional talent to the Middle East.
“More and more talented peo-
ple want to come to the region
because there are less decent job
opportunities available in the
West, mainly in the UK and the
US. The region proves to be very
attractive to these professionals,
and this is a good thing for all
business sectors and economies
here. In financial services, es-
pecially, we have a lot of highly-
qualified people coming in,” Faye
said.
However, Faye warned that
the crunch may affect the region
in the future.
“The only danger that we see
is inflation, which is linked to
the situation of the dollar. That
could be an issue in the coming
years, but at the moment, it is
not,” he said.
Bain & Company has been
serving clients in the Middle
East since the early 1990s.
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