UAE Central Bank and Bank Indonesia team up to promote digital payments innovation

The two regulators will also co-operate on measures to combat money laundering and the financing of terrorism

The UAE Central Bank and Bank Indonesia will encourage the development of new FinTech companies and structures in both countries. Ryan Carter / The National

The UAE Central Bank and Bank Indonesia have signed an agreement to boost mutual co-operation in digital and cross-border payments and anti-money laundering.

The two regulators will work together to encourage innovation in payments and financial services to enable more efficient and secure transactions in cross-border payment systems such as retail payments, the UAE Central Bank said on Monday.

They will also co-operate to formulate frameworks to combat money laundering and the financing of terrorism.

“The signing of this MoU with our central bank counterparts in Indonesia reflects the CBUAE's strategy of developing the most efficient payment systems and working with partners to enforce global regulations to enhance confidence in the UAE financial market,” said Central Bank Governor Khaled Balama.

“It also demonstrates the clear objective of bringing together like minds to find new financial solutions and to strengthen the joint efforts against illicit financial activity.”

The UAE, which has strict laws to deal with money laundering and the financing of terrorism, has issued several regulations and adopted numerous measures to fight financial crime.

In November last year, the Ministry of Economy set up a new anti-money laundering department to ensure all non-financial businesses and professionals comply with local laws.

In August, Dubai set up a special court that focuses on fighting money laundering and other financial crimes to strengthen the integrity of its financial system.

The UAE Central Bank issued new guidelines in October to help licensed financial institutions – which lend to cash-intensive businesses in sectors such as retail, trading, travel and transport – to combat money laundering and the financing of terrorism.

The agreement will aim to enhance co-operation in the areas of payment systems and digital financial innovation, including conventional and Islamic finance, the UAE Central Bank said.

It will also support joint initiatives to examine cross-border payment systems and encourage the development of new FinTech companies and structures in both countries.

The UAE Central Bank and Bank Indonesia will also exchange relevant information "on issues of concern or common interest under the MoU, based on applicable laws and regulations in each jurisdiction and other considerations that may be relevant".

The agreement demonstrates the Bank Indonesia’s support for government efforts as a member of the Financial Action Task Force on Money Laundering and its commitment to combat money laundering and terrorism financing, said Perry Warjiyo, Governor of Bank Indonesia.