I remember the day we finished our business licensing process added to immigration or visa stamping in Dubai, next step was finding the right SME bank to open our first business bank account. Indeed, it was not a hassle free journey. In fact, we first established our startup within an incubation center that belongs to a free zone authority in Dubai which requires to provide a share capital certificate of AED 10,000 equivalent to USD 2,725 from your bank where you obviously opened your business account. Subsequently, I started gathering data from the market besides meeting dozen of entrepreneurs who were at the same boat then visiting a well targeted branches of banks that deal with small and medium enterprises or SMEs. Before discussing our list of questions raised during those meetings, let us glance through a quick overview of banks that have a range of financial products dedicated to SME segment in the UAE ranked by the number of branches and ATMs:
|#||Bank Name||Founded||# of Branches||# of ATMs|
|2||Abu Dhabi Islamic Bank – ADIB||1997||82||740|
|3||Union National Bank – UNB||1982||71||286|
|4||Emirates Islamic Bank||2004||65||92|
|5||Abu Dhabi Commercial Bank – ADCB||1985||50||350|
|7||Dubai Islamic Bank – DIB||1975||45||74|
|8||National Bank of Ras Al-Khaimah – RAK Bank||1970||38||285|
|9||Sharjah Islamic Bank – SIB||1976||33||134|
|11||Commercial Bank of Dubai – CBD||1969||18||120|
|12||Commercial Bank International – CBI||1991||16||56|
|13||United Arab Bank – UAB||1975||14||55|
Interesting data, isn’t it? Let start with our questions then:
- How many branches are dedicated to business or offering SME banking?
- Is the current bank’s policy comfortable with your business license type, activities and the industry you’re in?
- What is the minimum balance requirement by the bank?
- What if not met? How much the bank is going to charge then?
- How much does the bank charge on domestic/international fund transfers or remittances?
- Could this business account be opened in other foreign currencies?
- How many free cheque books does the bank offer?
- Does the bank offer digital/internet banking? Is it free?
- What about branch and cash handling transactions fee?
- Does this bank account have a relationship manager or RM?
How many branches are dedicated to business or offering SME banking?
For your information the above table includes both personal and business banking branches. It may seems curious to raise this question to your banker in the digital era where banks are urged to opt more for branchless banking services! Until this happen, you still need to visit your branch to open your business account, order a telegraphic transfer, collect your bank guarantee letter, or your share capital certificate and so forth. It all depends on your business requirements and banking priorities. Again, this question reflects your bank’s devotion to small and medium business segment beside easiness and reachability in conducting your banking transactions. Another metric that could be a determinant point in your case for instance is the number of ATMs and Cash Deposit Machines or CDMs.
Is the current bank’s policy comfortable with your business license type, activities and the industry you’re in?
Here is another good advice before visiting your nearest branch, call the bank on their toll free number to make sure that your business or trade license type you have is compliant with their current policy. As you know, many banks keep changing their policies based on macro/micro economic factors or new central bank instructions and circulars. Similarly, how the bank is familiar with your business industry would play a pivotal role if you’re thinking to apply for banking facilities in the future.
What is the minimum balance requirement by the bank?
We believe that a minimum balance is the most common crucial determinant of a check or current account because of its link to the monthly fee below balance charged by the bank if this rule is not met. In the UAE, a minimum balance range from AED 5,000 to AED 1,000,000 considering various business requirements from a case to another.
What if not met? How much the bank is going to charge then?
In general terms based on available data, UAE banks charge as low as AED 25 to AED 600 fee max if this minimum balance is not met on a business current account.
How much does the bank charge on domestic/international fund transfers or remittances?
Here you should clearly understand charges on online transfers for both local and international transactions you do via internet banking versus those you order physically at the branch like a telegraphic transfer (TT). similarly, how much does the bank charge if you transfer in foreign currency? Some banks do not debit from if you overreach certain transfer amount in foreign currency. In case of salary transfer to your employees, how much does the bank charge then per transaction?
Could this business account be opened in other foreign currencies?
Major business bank accounts could be opened in multi-currencies and not only in Arab Emirates Dirhams (AED). However, this question will lead us to another important one when it comes to exchange rates: Are there any special rates offered on this current account?
How many free cheque books does the bank offer?
Some banks offer free unlimited cheque books depending on the type of business banking account you’re going to open. Others charge per leaf or after the first free one. On the same line, what if:
- The cheque is returned? How much does the bank charge then? What about the clearing?
- How much is the fee for inward and outward clearing per cheque?
- How much is the fee for Post Dated Cheque warehousing? In case you want to warehouse your PDCs until date of clearance. In this regards, some UAE banks offer digital warehousing services so keep asking!
Does the bank offer digital/internet banking? Is it free?
Indeed, this is an indispensable service especially with the digital revolution that is going to disrupt the whole banking industry if not started already happening! So, you’re going to use the bank’s app on your smartphone, how much then will be the monthly fee if not free? What about internet banking setup fee? Is this a monthly or one time fee? Any monthly maintenance fee?
What about branch and cash handling transactions fee?
When visiting your nearest SME branch, you may require to withdraw or deposit cash in your account. Then, how many free teller or cash handling transactions the bank is offering? How much is charging per transaction? What about ATM & CDM transactions? Are they free? How much is the daily limit on ATMs or POS transactions?
Does this bank account have a relationship manager or RM?
Usually banks assign relationship managers or officers to their business banking accounts’ customers. It’s always good to ask to get to know each other well. However, it’s important to know how proactive is your RM in keeping you updated with tailor made solutions and answers to your business banking requirements especially in understanding your industry along with anticipated advices for future plans.
At the end, it’s a good habit to read well terms & conditions before signing any legal binding documents but keep asking questions if anything not clear especially in case of abstract clauses on contracts and agreements.