The United Arab Emirates

Abstract

The early history of banking in the UAE relates mainly to Dubai, with its focus upon commerce and its traditional trading relations with the Indian sub-continent and Iran. The British Bank of Iran and the Middle East (later BBME) set up an office in Dubai in 1946, based largely upon the trading connections between Southern Iran and Dubai and the exchange requirements, in terms of Iranian rials and Indian rupees, of the rich merchant families. When India gained independence it very quickly required all payment for Indian exports to be settled by an authorised bank, thus favouring banks, as opposed to exchange dealers, in Dubai. Local demand for advances was somewhat limited; in 1950 BBME had total advances of £57000, a figure which had multiplied ten-fold by 1960, but which, even so, was very modest.¹ Before the oil boom much of the prosperity of Dubai, and hence banking activity, centred upon the gold trade — that is the re-exporting of gold to India.