Abu Dhabi: The UAE Central Bank has ordered the closure of a small money exchange house after detecting irregularities, official sources told Gulf News on Tuesday.

The exchange, which has six branches — three in Dubai, two in Abu Dhabi and one in Sharjah — was owned by an Emirati and an Asian. But the Asian man absconded with the money collected from customers who complained to the authorities about their remittances not reaching the destinations during the past few weeks.

The authorities started legal action after receiving complaints and the exchange house was eventually closed down.

The UAE Central Bank was coordinating with the Abu Dhabi Judicial Department (ADJD) to constitute a committee with representatives of the ADJD, UAE Central Bank, Department of Economic Development (DED) and independent auditors. The committee will evaluate the amount of money siphoned off by the partner and the amount collected from customers, which were not remitted to the destinations.

The official sources said the customers would not lose the money and the money will be returned to them by the authorities.

The UAE Central Bank is responsible for financial services, including money exchange services. As licensing of businesses is under the purview of the DED, they are also involved in the investigation.

Officials have not completed the evaluation of the amount of money involved in the case. However, it is estimated that a few million dirhams have been taken away by the absconding partner, they said.

Customers who lodged complaints remitted Dh1,000 to Dh45,000 through the exchange house.

Meanwhile, an association of money exchange houses said the closed exchange was an unknown small player in the industry and it was a rare incident. “There were such incidents reported in the UAE during 1980s. But this is a rare development in the past two decades,” Mohammad Al Ansari, chairman of the Foreign Exchange and Remittance Group (FERG), told Gulf News on Tuesday.

He said the customers need not worry, as their money will be reimbursed from the bank guarantee of the exchange house. Depending on the capital and size of operations, an exchange house has to deposit between Dh3 million and Dh75 million as the bank guarantee, he said.

The closed exchange house being a small one, the number of victims and loss of money were not big, Al Ansari said.

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Tips for customers

An industry chief advised customers to look for certain warning signs when they deal with money exchange houses. If there is any undue delay in remittances reaching the destinations, customers should follow up the matter. “Mostly, money is remitted to the destination within a day or two,” said Mohammad Al Ansari, chairman of the Foreign Exchange and Remittance Group (FERG).

He said customers should not be carried away by cheapest offers. If a business offers the cheapest rate or lowest fee, it could be a warning sign because it could be the below the cost. It means their business is in trouble and they want to attract more customers, he said.

However, he reiterated that customers need not panic, as the closed exchange house did not have any major stake in the industry.