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UAE Central Bank imposes curbs on remittance firm owned by Indian

George Mathew

UAE Exchange has stopped new transactions through its branches and online platforms, with the exception of the operation of Wage Protection System, which it is allowed to operate until further notice, the CBUAE said. (File Photo)

The Central Bank of the UAE (CBUAE) has slapped curbs and decided to “oversee the operations management” of UAE Exchange LLC, a remittances and wage protection firm in the Middle East promoted by Indian billionaire BR Shetty. While UAE Exchange and its parent firm Finablr control a sizeable remittances business involving non-resident Indians (NRIs), Unimoni Financial Service, Shetty’s Indian operations, said it’s “not privy to the remittances business of UAE Exchange Centre and operates as an independent legal entity”.

UAE Exchange has stopped new transactions through its branches and online platforms, with the exception of the operation of Wage Protection System, which it is allowed to operate until further notice, the CBUAE said. In order to protect consumers, the central bank has required the exchange house to swiftly settle outstanding remittances and all other already initiated transactions, the UAE regulator said.

UAE Exchange has over 100 branches in the Middle East and is part of Shetty-controlled Finablr, which processed more than 150 million transactions managing $115 billion in volumes for its customers in 2018. Finablr has a direct presence in 45 countries through its licensed operations complemented by a network reach spanning 170 countries.

In India, Unimoni has over 2.5 million customers, served by over 3,500 employees through 350 branches across 300 locations. Unimoni operates as a non-banking financial company and AD (authorised dealer) II category registered with the Reserve Bank of India.

The CBUAE inspection team has started an exam ill take additional action, if necessary, once the examination is completed. UAE Exchange was a top player in the UAE’s Wages Protection System — which is the electronic salary transfer system that allows institutions to pay worker wages through authorised agents approved by the UAE regulator.

When contacted, Unimoni Financial Services Ltd said it is an independent legal entity operating as per the regulations of the RBI, with its separate governance and operating structures.

“The recent developments at UAE Exchange Centre LLC in the UAE do not have any material impact on the operations of Unimoni. Additionally, UAE Exchange Centre and BR Shetty do not have direct shareholding in Unimoni Financial Services, India,” it said in an email reply to The Indian Express.

The company said Unimoni India is not privy to the remittances business of UAE Exchange Centre, adding that “Unimoni India is a receiving agent of various global money transfer companies including MoneyGram and Xpress Money, with a remittance operations license under the AD-II category.” BR Shetty is the non-executive Chairman of Unimoni.

The troubles at UAE Exchange are expected to impact the parent firm Finablr, sources said. Shetty — the founder of UAE Exchange Centre and NMC Health - recently acquired a majority stake in Travelex, a UK-based foreign exchange company for around $1 billion. Travelex and UAE Exchange were placed under the holding company Finablr, which went for an IPO last year.

Shetty, one of the leading business icons in the Middle East, was listed among Forbes’ Top 2 Indian business leaders in the Arab world in 2018. He currently serves as the co-chairman of Finablr PLC, which is listed on the premium segment of the Main Market of the London Stock Exchange (LSE).

He also serves as the joint non-executive chairman of NMC Health PLC, which is listed on the LSE, included as part of the coveted Financial Times Stock Exchange 100 Index and inducted into the MSCI World Index.