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Global banking regulations pose threat to money exchanges2015-05-19

Global banking regulations pose threat to money exchanges

Industry body to discuss its concerns with lenders and the central bank

Dubai: The currency exchange houses that are primarily engaged in money transfer and foreign exchange business in the UAE are facing growing challenges from a banking industry facing ever-growing global banking regulatory requirements, said Osama Al Rahma, chairman of the Foreign Exchange and Remittance Group (FERG), the UAE remittance industry body.

“Under growing pressure from international banks and banking sector regulators, banks are required to undergo stringent compliance standards [that] make some lines of business less lucrative for them and some of them have either quit or are rethinking the future of these lines of businesses,” said Al Rahma.

Although the UAE based exchange houses are regulated by the Central Bank of UAE and follow stringent compliance standards, FERG officials say under the pretext of negotiating compliance standards, international banks and foreign regulators are forcing local banks to disengage from exchange houses and money transferors.

“The support of local banks is an important element in money transfer business as all transactions are executed through the banking channel. If the banking sector refuses to do business with exchange houses, this business will come to a standstill,” said Rajiv Raipancholia, FERG Secretary.

As part of its efforts secure the support of the UAE banking sector for exchange houses, FERG is planning to take up their concerns directly with the Central Bank of UAE and the UAE Banks Federation (UBF).

Meaningful role

“Exchange houses have a meaningful role in the financial ecosystem of this region in terms of financial inclusion and a source of meeting the banking needs of the low-income groups, thus it is important for us to stand together as a group and communicate our issues with banks and relevant authorities,” Al Rahma said.

Relatively low transaction yields, rising operational costs and ever-increasing compliance requirements are driving at least a few leading banks in the UAE to rethink their relations with money transfer businesses.

While a few banks themselves are offering money transfer services to their customers at competitive rates, exchange houses are worried that they could eventually get marginalised in the financial ecosystem of the UAE.

“I think as an industry we need to collectively engage the banks in the country and address their worries in terms of compliance requirements,” Raipancholia said.

Exchange companies are governed by strict anti-money laundering (AML) regulations specified and monitored by the Central Bank of the UAE. Currently these companies have strong initiatives in place to streamline their operations with requirements on ‘Know Your Customer — [KYC]’ principles to safeguard the interests of consumers, regulators, shareholders, employees and the community in general.

Exchange houses in the UAE have a unique role in the financial services business in the country. Apart from the money-changing business, exchange firms in the UAE are the primary channels for transferring large volumes of remittances. In 2014, the industry is estimated to have transferred more than Dh140 million. In addition, they also provide various ancillary services like credit cards payments, saving schemes such as National Bonds, encashment of travellers cheques, salik and mobile top ups as well as accepting payments for airline tickets.

According to the Central Bank of UAE, there are 140 money-exchange companies with a combined network of over 974 branches across the emirates.

FERG currently has 61 exchange houses as members.

FERG’s role is to ensure implementation of best practice standards among exchange houses in the UAE, in addition to providing a platform for sharing knowledge related to the financial industry. It also ensures the industry’s views and opinions are heard and considered by regulatory and government bodies.

Source: Gulf News, May 18th 2015.



Curbing cyber crime2015-05-19

Curbing cyber crime

Digitisation helps industry to offer consistent quality of services.

Dubai: When it comes to sending remittances home, the expatriate community in the UAE prefers over-the-counter interaction than digital platforms, according to Y. Sudhir Kumar Shetty, vice-chairman of the Foreign Exchange and Remittance Group, or FERG.

Despite the digital trend still germinating, Shetty said FERG is already taking steps to set regulations against cyber crime.

“Digitisation around the world has really helped take the industry forward in terms of consistent quality of services,” Shetty told Khaleej Times.

FERG, a non-profit association formed as an initiative by the Central Bank of the UAE, represents the exchange industry in the UAE on a regional and international platform.

“Technology is a big boon for our industry, but it has also exposed us to various attacks. As the market matures, we as operators in this industry have embarked on a mission to implement the latest technology and security equipment available to safeguard data, customers’ information and the industry in general,” Shetty said.

Rajiv Ashok Raipancholia, Secretary at FERG, said: “As we are a group of exchange companies, we remit millions of dollars on a daily basis as an industry. This makes us very much prone to cyber crimes. We are looking at training on a counter level and branch level.”

“We have been very active in the past four months. We have had meetings and trainings with the Dubai Police with regards to safety and security; how we, as exchange companies, can work together to make sure no fraud attempts take place from the outside.”

Since FERG’s official establishment in 2008, there has been significant process in the sector, including a strong presence in international forums and events where information is gathered to safeguard the industry, operate in an efficient manner and offer the best products and services to customers in the UAE.

“We need to have robust mechanisms to monitor transactions on our counters. The compliance department has to be strong in day-to-day operations and systems need to be completely automated. We have to be vigilant, because in today’s world, it is compliance that runs the business,” Raipancholia added.

Shetty said strict anti-money laundering regulations and the ‘know your customer’ policy are very well entrenched into the system. We follow the guidelines stipulated by the regulators in our countries of operation, where it is mandatory to register your customer and establish their profile, so you know exactly the capacity of a person to remit money.”

“This serves as a guide for the UAE’s 139 licensed foreign exchange and remittance companies to cater to different customer segments — ranging from the tech-savvy residents and next-gen audience to blue collared workers — with a mix of brick-and-mortar networks and technology.”

Source: Khaleej Times dated May 19th 2015.



FERG members waive remittance charges to Nepal for the month2015-05-05

FERG members waive remittance charges to Nepal for the month

The Foreign Exchange and Remittance Group (FERG), comprising of businesses engaged in money exchange and remittances, has invited all its members to waive remittance charges to Nepal for a full month as a humanitarian service.

The move comes after a ferocious earthquake of 7.8 magnitude caused devastation across the country, and left a death toll that has crossed 6,100 and is still climbing. Over 11,000 others have been injured. A total of 8 million people have been affected by tremors that levelled historic temples and buried an Everest base camp under tonnes of snow.


“At this critical juncture for the Nepalese people, a smooth inflow of funds is of the utmost importance. FERG wants to play a role in providing succour to those affected by the quake. Homes have been damaged and people injured. We’ve requested all our members to waive all remittance charges for transfers to Nepal so that well-wishers, donors and Nepalese expatriates in the UAE can transfer funds to the country as easily as possible,” said FERG Chairman Mr. Osama Al Rahma.

 “Our hopes and prayers are with the people of Nepal in these hard times. We recognise that timely assistance for people in the country is essential. That’s why we’ve asked our members to waive their fees, and are also encouraging other stakeholders in the sector to participate in this campaign to ensure funds get where they are needed at no additional cost,” concluded Al Rahma.

Source: CPI Financial dated 03rd May 20115

Foreign Exchange and remittance center’s train staff to combat crime2015-05-03

Foreign Exchange and remittance center’s train staff to combat crime

Training held to teach staff how to identify potential criminals, counterfeit currencies, and fight cybercrime


Dubai: Foreign exchange and remittance centres in the UAE have taken proactive steps to minimise risks and detect crimes at their centres by getting training from Dubai Police.

The Foreign Exchange and Remittance Group (FERG), comprising around 65 exchange houses in the UAE, recently underwent an exclusive joint training session with a delegation from the Dubai Police’s Criminal Investigation (CID), Cyber Crime, and Organised Crime and Money Laundering departments. The sessions focused on how to identify and monitor transactions that might have risks associated with them.

Major Al Joker from the CID said criminals employ various schemes when they want to attack exchange houses. “These can range from indirect approaches to direct physical crimes. Staff awareness must be raised to prevent such attacks, or take necessary safe action, in such an event,” Al Joker said. Less than two weeks ago, a veiled woman attempted to rob an exchange house in Abu Dhabi using a gun that later turned out to be plastic. The suspect was arrested at the scene.

Osama Al Rahma, FERG Chairman, said the exchange house’s alertness helped police apprehend the suspect.

“The staff have basic knowledge through the in-house training. All exchange houses are well-equipped and totally connected 24 hours with the police by the alarm systems, infrared protectors during closing times, and latest surveillance cameras,” Al Rahma told Gulf News.

“Keeping the staff and officers of the exchange houses always updated with the latest security alert and security awareness is something important for us from the FERG perspective,” he added.

But even with all the latest surveillance technology, Al Rahma said they are not taking any chances by not training their staff on how to deal with the attackers themselves.

“They need to be able to handle certain cases or situations, especially during an attack. These things are more understood and analysed by the Criminal Investigation Department of Dubai Police. So they shared this information with us to ensure that we have updated security awareness across our network which will help the whole community,” Al Rahma said.

Apart from identifying criminal behaviour, police officers also trained the staff on how to detect counterfeit currencies and examine common cyber crime categories.


“There was an alert sent to us a few weeks ago by the Central Bank about cyber attacks on financial institutions warning us to take more precautions. We don’t necessarily have to wait for something to happen before [doing the training]. With understanding and planning, it helps you be on the preventive side and helps you minimise risks,” Al Rahma said.

FERG launches new online presence to serve USD 30 billion exchange and remittance industry in UAE2015-01-04

The Foreign Exchange and Remittance Group (FERG) has announced the launch of its new online presence to better represent the voice of the UAE's USD 30 billion exchange and remittance industry in the UAE.

The announcement coincided with the FERG Annual General Meeting being held at the Shangri La Hotel, Sheikh Zayed Road, Dubai.

FERG, which was blessed as per a Central Bank of the UAE initiative, has unveiled its new website as it pushes for advances in communication, compliance, better regulation and effective anti money laundering (AML) initiatives.

"FERG is constantly striving for an innovative yet stable foreign exchange and remittance industry that contributes to the economic and social wellbeing of its customers. As we push for our industry to evolve to meet the needs of the 21st century, we recognize the need for transparent communication and a clear agenda. We have entirely revamped our online presence to offer useful information to our members and their customers," FERG Chairman Mr Osama Al Rahma.

The remittance industry in the UAE is one of the most active in the world, seeing over AED 110 billion transferred annually from the country to expatriate workers' home markets.

"We want to position UAE as a market leader in global exchange and remittance flows, and we want to lead the way in transparency and world class service provision. We believe our new online presence is a step in the right direction," Al Rahma added.

The new site can be accessed at www.ferguae.org. The portal offers facts, figures, an updated event schedule of FERG events, and bios of the organisation's board members. A comprehensive section for media information and an FAQ page are also easily accessible. Most of the UAE's notable exchange houses are FERG members.

Source: Zawya, dated 30th December 2014

FERG turns up heat on grey transactions through robust anti money laundering initiatives2014-12-29

Dubai-December 21,2014: The Foreign Exchange and Remittance Group (FERG) has turned up the heat on money laundering and frauds at its recent Anti Money Laundering (AML) & Combatting Terrorist Financing (CTF) conference, held at the Rose Rayhan Rotana Hotel in Dubai. The aim of the conference was to discuss new and sophisticated AML & CFT measures, set out best practices to combat grey transactions, and highlight new risks and fraudulent methods being discovered in the industry globally.

"FERG is registered with Dubai Chamber of Commerce & Industry with the support of the Central Bank of the UAE. We advocate the transfer of money globally through channels that are secure, transparent and governed by strict Anti-Money Laundering regulations as posited by the Central Bank of the UAE. FERG is committed to completely stamping out grey areas and unethical practices in the remittance and exchange sector," said FERG Chairman Mr. Osama Al Rahma.

This event was graced by Mrs Nada Hussain Al Ali, STR analyst from the Central Bank of the UAE (AMLSCU Department) who spoke in breath about the FATF revised recommendations and Risk Based Approach that the exchange houses need to follow while conducting/monitoring the transactions. Mrs. Nada Hussain Al Ali was actively involved during the questionnaire session and successfully guided the Compliance fraternity.

Members' Views:

FERG member Al Ansari Exchange highlighted on one of the key topics discussed at the conference was the 21st century AML techniques. The discussion highlighted the possibility of 'smurfing', whereby large transactions are restructured into smaller ones that don't draw attention. The possibility of money mules - people recruited to transfer stolen money across national borders - was also discussed

FERG member Al Rostamani International Exchange highlighted the importance of strict compliance procedures to combat money laundering and terrorist financing. According to the Al Rostamani International Exchange proper controls such as transaction screening, real time monitoring, pattern analysis etc...should be in place to detect / identify any suspicious transactions and report the same to the regulatory authority. As a mandatory requirement the entire log of daily transactions should be uploaded to the UAE Central Bank at the end of each day for their review.

Al Fardan Exchange, a member of FERG discussed the AML / CFT compliance program, its importance and objectives. The presentation highlighted the policies, procedures and actions that help prevent law violations and detect them. The compliance program helps ensure that a financial institution has a compliant culture, and minimizes risks to the reporting entity and

its directors/management and employees of criminal, civil or administrative liability. The presentation stressed on the need for financial institutions to develop and implement a compliance program to meet AML/CFT laws, regulations and standards including reporting, record keeping and client identification obligations

Orient Exchange, a FERG member stressed on the necessity for all exchange houses to deploy AML compliance vested software to monitor every payment instructions routed through their system. Attendees at the AML conference also discussed the importance of vigilance, staff training and regular auditing to discover irregularities. Better and more timely communication with banks and other financial partners was called for.

UAE Exchange, also a FERG member, pointed out the importance of combatting fraud across all sectors and released the findings of a recent research done by the exchange house which showed that a financial organization typically loses 5 percent of revenue a year due to fraud alone.

"It's important to realize that threats of fraud are internal as well as external. Externally, we need to watch out for counterfeit currency, identity theft, transaction manipulation and fake identifications. But there are also internal risks that all financial institutions must guard against, such as collusion, misuse of authority, and data manipulation to hide misappropriation. The first step is always to identify the risk, and then put in place regulatory measures to guard against it," Al Rahma added.

Arablink Money transfer contributed to the AML gathering by stressing on the most common transactions that occur in the remittance business and offering a checklist of compliance and best practices that have been proven to reduce instances of fraudulent activity and money laundering.

Meanwhile, Lulu International Exchange touted the benefits of technology in automating data analysis to catch suspicious transactions. Compliance Officers can use big data to create models that gather, analyse, assess and quantify risks. Automated triggers can be set up for activity that looks statistically improbable, flagging up unusual transactions for manual overview.

"Non-compliance with the best AML practices has a negative effect on brand equity for exchange houses. Not only can it hurt the image of the remittance and exchange industry as a whole but can also lead to more serious repercussions such as regulatory fines or even license provoking," concluded Al Rahma.

Source: Zawya, dated 21st December 2014

FERG gathers exchange companies under one roof2014-12-07

Dubai : Exchange companies in the UAE have come together to form the Foreign Exchange and Remittance Group (FERG). The main objective is to work for the betterment of the exchange industry and create a conducive environment for their business growth and facilitate a healthy competitive market for all. The Group is licensed by the Dubai Chamber of Commerce & Industry (DCCI) and works under the aegis of the Central Bank of the UAE (CBUAE).

The idea of creation of a group working for the benefit of the exchange sector was initiated by a few top exchange companies under the leadership and vision of its founder Chairman, Mr. Mohamed Al Ansari in the early 2000s. The Steering Committee as it was then known, met frequently to discuss and debate issues relating to the Sector and liaised with CBUAE, Ministries, Regulators in correspondent countries, etc. to bring about a change in mindset about this Sector and accept and acknowledge the contribution of this Industry in the social and economic growth.

In 2006, the Committee decided to formalize this union and FERG was created. FERG currently has 61 members, who jointly control over 85% of the exchange and remittance business in the UAE.

FERG is managed by highly experienced Industry leaders with a vision to position the UAE as the global leader in the exchange and remittance business. The current office bearers are: Osama Al Rahma - Chairman, Sudhir Kumar Shetty - Vice-Chairman,. Rajiv Raipancholia - Secretary, Adeeb Ahamed - Treasurer, S. Karunakaran- Joint-Treasurer.

“The idea behind FERG has been to advocate for reform and progress in our industry. We’ve taken up issues that have led to favorable policy changes. We work very closely with financial regulators and law enforcement to completely weed out non-compliant financial transactions and unethical business practices to have an innovative yet stable foreign exchange and remittance industry that contributes to the economic and social wellbeing of our customers,” said Osama Al Rahma, Chairman of FERG.

“We’re effectively evolving the industry to meet the challenges of the 21st century. FERG wants to help all its members to comply with local directives and global best practices. It’s in all our interest because non-compliance with best practice means negative brand equity for the entire industry” , added Al Rahma.

It is estimated that Dhs110 billion are transferred annually by UAE’s expatriate workers to home markets. In addition to remittances, exchange companies are a one stop shop for all the financial needs, as services such as credit card bill payments, credit card encashment, international mobile phone top ups, National Bonds, Salik payments, etc. are also provided.

SOURCE: Gulf Today. Dated: 14th December, 2014