KARACHI: One of the largest privately owned banks in the United Arab Emirates has decided to move about 47 percent of its UAE-based employees to India, Pakistan and Egypt to cut down expenses and transform itself into a global digital bank, said a financial expert who works with the organization.
Mashreq Bank internally announced its relocation plan on Monday, saying it would be implemented in three phases.
“The bank, which is owned by Al-Ghurair Group, will relocate 47 percent of its staff from the UAE to India, Pakistan and Egypt on the basis of their nationalities,” the bank employee, who did not want to be named since the decision has not been made public, confirmed while talking to Arab News from Dubai on telephone.
According to the organizational data compiled in September 2019, the total number of employees at Mashreq and its subsidiaries is about 5,000.
The decision, which remained under consideration for a few months, is likely to impact around 900 employees immediately. Most of these staff members belong to India and Pakistan.
Mashreq was the first bank in the UAE that introduced electronic modes of banking such as ATM cash dispensers, debit and credit cards, and consumer loans.
It also became the first bank in the Arab country to offer chip-based credit cards, digital point-of-sale readers, and investment funds directly linked to global stock markets.
Industry experts say the bank’s decision will not only help its management save expenses but also give it an opportunity to practice virtual banking at a bigger scale.
“Mashreq wants to present itself as a model of digital banking to the world,” said the employee. “It wants to operate as a virtual bank that does not require a lot of real estate and investment. The bank was also the first to introduce the concept of digital banking and it seems that its latest move is a continuation of the same vision.”
The financial results posted on Mashreq’s website show a net profit of AED450 million in the first quarter of 2020 and AED85 million in the second quarter.
The bank posted a loss of AED183 million in the third quarter.
Financial experts in Pakistan maintain that Mashreq’s move will benefit the country’s economy in several ways.
“It will increase the amount of remittances. Besides, the relocated employees will also be spending in the local context that will support their home economy,” Samiullah Tariq, Head of Research at the Pakistan Kuwait Investment, commented.
Under the current economic situation, many banks have already shifted their back offices to other locations. However, Mashreq’s back office will continue to remain in the UAE.
Last November, Pakistan signed $370 million Syndicated Term Loan and Murabaha Financing Facilities with Dubai-based Emirates NBD. Mashreq Bank was also part of the syndicate along with other companies.