The UAE has launched a brand new Central Financial institution legislation to strengthen monetary stability and defend shopper rights.
President His Highness Sheikh Mohamed bin Zayed Al Nahyan issued Federal Decree Regulation No. (6) of 2025 on the Central Financial institution, and the regulation of economic establishments, actions, and insurance coverage operations.
The brand new Federal Decree Regulation kinds a part of the UAE’s ongoing efforts to boost the legislative and supervisory frameworks of its monetary sector.
UAE Central Financial institution legislation
It goals to bolster the soundness, competitiveness, and international alignment of the UAE’s monetary ecosystem whereas reinforcing the Central Financial institution’s independence and core position in guaranteeing financial and monetary stability.
The legislation defines the Central Financial institution’s principal features, together with the institution and implementation of financial coverage, the supervision of licensed monetary actions in step with worldwide requirements, and the issuance of laws to make sure prudent and efficient monetary practices.
It additionally mandates the Central Financial institution to handle overseas reserves to cowl the financial base, assist sustainable financing practices, and oversee the infrastructure of economic markets.
The establishment is tasked with monitoring regulatory dangers, integrating governance ideas, and guaranteeing sound administration of the nation’s overseas reserves.
The Federal Decree Regulation highlights buyer safety and monetary inclusion, requiring licensed monetary establishments to offer community-wide entry to correct banking and monetary companies.
This aligns with the UAE’s broader push towards digital transformation and monetary innovation.
It establishes frameworks for nationwide consciousness campaigns, developed in cooperation with the monetary sector and group organisations, and reaffirms insurance policies aligning credit score services with buyer revenue to forestall irresponsible lending.
Shopper safety
The patron safety system has additionally been enhanced by unifying the complaints course of underneath the unbiased entity “Sanadak”, which handles and settles disputes between clients, banks, and insurance coverage corporations.
Specialised judicial committees will adjudicate monetary disputes, with selections as much as AED100,000 ($27,230) deemed closing and enforceable.
To guard clients and preserve monetary stability, the legislation outlines proactive measures for early intervention in circumstances of economic deterioration amongst licensed establishments.
These embody restoration plans, capital or liquidity changes, administration modifications, or direct Central Financial institution intervention via non permanent committees, mergers, acquisitions, or liquidations the place crucial.
The Central Financial institution is formally designated because the “Decision Authority”, giving it powers to handle monetary crises by eradicating or appointing administration, recovering funds from accountable events, transferring or promoting property, and restructuring capital. It might additionally set up non permanent entities to handle property or make sure the continuity of important monetary companies.
In a transfer to strengthen accountability, the Federal Decree Regulation raises the ceiling for administrative fines to mirror the severity of violations and the scale of associated transactions.
Central Financial institution fines
The Central Financial institution can now impose proportional fines of as much as ten occasions the worth of the violation or unjust enrichment.
These fines could also be robotically debited from accounts held by violators on the Central Financial institution or different licensed monetary establishments.
The Central Financial institution additionally has the precise to succeed in a reconciliation earlier than a closing judicial determination and will publish penalties on its official web site to advertise transparency and market self-discipline.
Key stipulations and goals of the Decree Regulation
The UAE Authorities Media Workplace outlined the next key stipulations and goals underneath Federal Decree Regulation No. (6) of 2025:
- Entry to monetary companies: Licensed monetary establishments should present all group members with entry to applicable banking and monetary companies, in step with digital transformation and innovation efforts
- Enhanced shopper safety: The legislation unifies complaints and dispute decision features for patrons of banks and insurance coverage corporations
- Early intervention measures: Proactive procedures are established for early intervention and settlement in circumstances of economic deterioration of licensed establishments
- Administrative fines: The ceiling for fines is raised to mirror the severity of violations and transaction volumes, as much as ten occasions the worth of the violation
- Automated reconciliation: Fines could also be robotically debited, with reconciliation permitted earlier than closing judicial rulings and the publication of penalty settlements on the Central Financial institution’s web site
- Financial and monetary stability: The legislation safeguards the soundness of the nationwide foreign money and the broader monetary system whereas guaranteeing prudent administration of overseas trade reserves
- Ample ensures: Licensed monetary establishments are required to keep up adequate ensures for all services offered to pure individuals and sole proprietorship clients
