Abu dhabi: President His Highness Sheikh Mohamed bin Zayed Al Nahyan has issued Federal Decree Law No. (6) of 2025, focusing on the operations of the Central Bank and the regulation of financial institutions and insurance activities within the UAE. This legislative move is aimed at refining the financial sector's regulatory frameworks and ensuring its alignment with international standards.
According to Emirates News Agency, the Federal Decree Law underscores the UAE's commitment to enhancing the stability and competitiveness of its financial ecosystem. It seeks to bolster the Central Bank's role in maintaining financial and monetary stability, ensuring prudent management of foreign reserves, and safeguarding the stability of the national currency.
The law outlines the Central Bank's principal functions, which include establishing and implementing monetary policy, supervising licensed financial activities, and issuing necessary regulations to ensure effective financial practices. It also tasks the Central Bank with managing foreign reserves, supporting sustainable financing practices, and monitoring regulatory risks.
In terms of customer protection and financial inclusion, the decree mandates that licensed financial institutions provide access to banking and financial services for all community members, in line with digital transformation efforts. It promotes national awareness campaigns in collaboration with the financial sector.
The law enhances consumer protection by unifying the complaints process for customers under the independent entity "Sanadak." It establishes judicial committees to adjudicate financial disputes, with decisions being final and enforceable for amounts up to AED100,000.
Proactive measures for early intervention are outlined to address any signs of financial deterioration within licensed institutions. These include implementing recovery plans, imposing additional capital requirements, and restructuring business strategies or operational structures.
The decree also defines the Central Bank as the 'Resolution Authority' during financial crises, granting it the power to manage financial institutions, appoint guardians, and conduct organized liquidations or bailouts.
Administrative penalties have been revised to reflect the severity of violations, with fines potentially reaching ten times the value of the violation. The Central Bank is empowered to automatically debit fines from accounts and publish penalty decisions to enhance market transparency.