The Central Bank of the United Arab Emirates and the Reserve Bank of India on Monday signed a Memorandum of Understanding (MoU) on supervisory co-operation and exchange of information.

In a statement, the Central Bank of the UAE said the agreement was signed to emphasise the importance that it attaches to banking cooperation with international supervisory and monetary authorities.

Saeed Abdulla Al Hamiz, Assistant Governor for Banking Supervision at the UAE Central Bank, and Mrs. Meena Hemchandra, the Executive Director of the Reserve Bank of India, signed the MoU in Abu Dhabi.

"This MoU puts in place a mechanism for cooperation in supervision of banks and other financial institutions operating in both jurisdictions and exchange of supervisory information, in line with the local laws of each jurisdiction and in accordance with the principles of Basel Committee on Banking Supervision on Home-Host country's supervisory authorities information sharing. This will contribute to the realisation of a sound financial system in the UAE and the Republic of India," the UAE Central Bank said in a press release.

In his remarks at the signing ceremony, the Assistant Governor of the UAE Central Bank welcomed the delegation of the Reserve Bank of India and stressed the need for cooperation and coordination with supervisory authorities to ensure stability of the financial system.

For her part, Executive Director of the Reserve Bank of India, said, "The Reserve Bank of India is pleased to sign this Memorandum of Understanding with the Central Bank of the UAE. It is a very important addition to the existing MoUs established between the Reserve Bank and other banking regulators/supervisors around the world. It reflects the Bank's commitment to cross-border supervisory co-operation."

"The UAE has become a hugely important financial hub and an area in which we see increasing levels of financial business being undertaken. The MoU will enhance this relationship," she added