Tougher economic conditions and more intrusive supervision is forcing banks in Dubai to consolidate to preserve margins and profitability.
Old habits die hard though, especially in hard times. Lawyer Radha Stirling is founder and CEO of the legal and human rights organisation Detained in Dubai, which helps people that fall foul of Dubai's laws.
“Having represented investors, banks and their customers for over a decade, I have noted that conditions for expats and investors worsen in the event of economic downturn. When oil prices are low or unstable, banks are under pressure to recoup losses,” she says.
“During downturns, banks have acted far more aggressively than usual, declining reasonable payment plans or settlement offers, increasing illegal harassment of debtors and reporting debtors to Interpol for intimidation purposes. Despite introducing a bankruptcy law that gave investors hope, it has been ineffective in preventing the persecution of investors, entrepreneurs and loan defaulters.”
Can consolidation and friendlier laws keep Dubai's reputation intact as the Middle East's leading business hub? Time will tell.