July 28, 2022
1 min read

CBUAE sanctions 6 banks operating in country

The financial sanctions take into account the banks’ failures to achieve appropriate levels of compliance regarding required due diligence and reporting procedures and standards…reports Asian Lite News

The Central Bank of the UAE (CBUAE) has imposed financial sanctions on six banks operating in the UAE, pursuant to Cabinet Resolution No. 9 of 2021, implementing certain provisions of the Organisation for Economic Cooperation and Development (OECD)’s Multilateral Administrative Agreement for Automatic Exchange of Information and Common Reporting Standard (CRS).

The CRS is a global methodology for the automatic exchange of financial accounts and tax-related information with other financial regulatory organisations across the world through secure channels.

It sets out the required information to be exchanged, the types of financial institutions required to report, the different types of financial accounts and account holders in scope, as well as the common due diligence procedures to be followed by financial institutions.

The financial sanctions take into account the banks’ failures to achieve appropriate levels of compliance regarding required due diligence and reporting procedures and standards. All banks operating in the UAE have been allowed ample time by the CBUAE to implement the CRS.

The CBUAE is committed to complying with all regulations to strengthen the nation’s financial and banking system. This supports the UAE’s commitment to global initiatives to enhance the integrity and transparency of tax systems and combat tax evasion.

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Pakistan Risks Overstretching Itself in Yemen War

Pakistan’s expanding military role in Saudi Arabia amid the Yemen conflict could strain its defence resources and fragile finances…reports Asian Lite News Desk Pakistan’s military involvement in the war in Yemen may prove unsustainable because of mounting financial pressures and competing security demands, according to a new report. Islamabad’s growing military presence in Saudi Arabia risks stretching its defence resources while exposing the country to greater strategic and economic challenges. An article by Andrew Wilson in One World Outlook describes Pakistan’s involvement as a case of “fiscal and strategic overreach”, arguing that the country lacks the financial flexibility to sustain an expanded military commitment. Pakistan’s external finances depend heavily on an International Monetary Fund (IMF) programme, financial support from Gulf countries and remittances from Pakistani workers in the region. The report argues that deeper military involvement in the conflict could place additional pressure on these sources of financial stability. It also warns that deploying troops and military equipment abroad could weaken Pakistan’s capacity to address security challenges along its eastern border and deal with two domestic insurgencies. The move could also draw Islamabad into a conflict it has sought to approach cautiously. A Reuters report in May, citing Pakistani security and government sources, said Islamabad had deployed around 8,000 troops, a squadron of approximately 16 aircraft, mostly JF-17 fighter jets, two drone squadrons and a Chinese HQ-9 air-defence battery to Saudi Arabia. According to those sources, Riyadh was financing the deployment, with Pakistani personnel operating the equipment. The sources also said a confidential agreement contemplated the possibility of deploying up to 80,000 troops. Islamabad has not confirmed those figures, although it has acknowledged its military presence in Saudi Arabia, including the deployment of fighter jets at King Abdulaziz Air Base from April. The One World Outlook article argues that Saudi financial support can cover allowances and operating expenses but cannot easily replace military equipment needed elsewhere or resolve the political and strategic challenges of participating in the Yemen conflict. Pakistan’s defence budget is another concern. For the 2026-27 financial year, the federal government allocated PKR 3 trillion, or approximately $10.8 billion, to defence services. The allocation represents an 18 per cent increase from the original PKR 2.55 trillion provision and amounts to around 2.1 per cent of projected gross domestic product (GDP). Defence spending accounts for approximately 16 per cent of the federal government’s PKR 18.8 trillion expenditure. Military pensions are budgeted separately at PKR 822 billion, while debt servicing costs stand at approximately PKR 8 trillion, more than two-and-a-half times the defence allocation. The report argues that these competing financial obligations leave little room for additional military expenditure without placing further pressure on public finances. Pakistan’s reliance on IMF assistance also limits its fiscal flexibility. The country must meet the conditions attached to the programme, including a primary budget surplus target of 2 per cent of GDP and continued restraint on development spending. According to the article, these requirements make it difficult for Islamabad to finance an additional military commitment without compromising other budgetary priorities. Pakistan’s economic indicators offer limited reassurance. Economic growth for the 2025-26 financial year is estimated at between 3.6 and 3.7 per cent, while inflation reached approximately 10.3 per cent in September following an energy price shock. Foreign exchange reserves stood at around $21.5 billion at the end of September. Although this marks an improvement from the low levels recorded in 2023, the report notes that the reserves cover only a few months of imports. Financial assistance from Gulf partners remains central to Pakistan’s external stability. The article says Islamabad holds approximately $8 billion in Saudi deposits at its central bank. In July, the State Bank of Pakistan said Riyadh had extended the maturity of $5 billion in deposits to December 2028, easing the country’s immediate external financing requirements. A further $3 billion deposit was also extended in the spring. However, the article argues that these arrangements provide temporary relief rather than long-term financial independence, particularly as regional conflict threatens the stability of the Gulf economies on which Pakistan relies. The report concludes that Pakistan faces a difficult balance between supporting Saudi Arabia militarily and preserving the financial and military resources needed to address its domestic and regional challenges.
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