UAE banks have fully adopted the UAE Fund Transfer System (UAEFTS) that enables them to conduct all interbank local fund transfers denominated in the dirham through a single fund transfer mechanism.
Under the new system, all domestic fund transfers are routed through the new central bank portal.
The system functions as real time gross settlement system (RTGS) which enables faster transactions. The UAE introduced International Bank Account Numbers (IBAN) for all bank customers from November 19. The new domestic fund transfer system is based on IBAN.
“As mandated by the Central Bank, all local dirham transactions are now credited to the beneficiary solely on the basis of IBAN. It is the responsibility of customers who transfer the money and the banks involved to use correct IBAN to avoid errors in fund transfers,” said a banker. The new fund transfer system is applicable to all types of domestic fund transfers such as salary payments, bank remittances, credit card payments and charitable contributions identified by their respective banking codes.
Apart from the normal interbank fund transfers, the new rule is also applicable to standing instructions to banks relating to dirham payments within the UAE.
“If a customer has a standing order to execute a payment from his/her account to a beneficiary or multiple beneficiaries, the customer needs to advise the bank of the correct IBAN of the beneficiary.
“In the absence of such advice the standing orders will fail,” a senior banker told Gulf News.