Payments are normally effected by letter of credit. There are no exchange controls in the UAE and its currency, the UAE dirham, is freely convertible. The dirham is linked to the US dollar, the currency in which oil revenues are paid. The regulatory authority since 1980 has been the UAE Central Bank. Some 47 commercial banks operate, with a total of around 350 branches, of which about 28 are foreign banks with a combined total of more than 200 branches.
Federal law restricts foreign banks to no more than eight branches each.
Federal law requires that every commercial bank must have a paid-up capital of at least Dh 40 million. There are few investment or merchant banks at present. Its main objective is to help develop the private sector. Bill discounting can be arranged with the commercial banks, either foreign or locally owned. Leasing and hire purchase are available from local finance companies specialising in this business.