UAE enacts new law to reinforce CBUAE’s financial oversight

Image: WAM

The UAE’s President Sheikh Mohamed bin Zayed Al Nahyan has issued Federal Decree Law No (6) of 2025, concerning the Central Bank of the UAE (CBUAE) and regulation of financial and insurance institutions.

The decree law aims to strengthen the CBUAE’s independence, enhance the stability and competitiveness of the UAE’s financial sector, and align regulation with global standards.

It mandates maintaining currency stability, safeguarding the financial system, and prudent management of foreign reserves.

Under the law, the central bank’s principal functions include implementing monetary policy, supervising licensed financial entities in line with international norms, issuing regulations, and overseeing financial market infrastructure.

It is also assigned the role of “resolution authority” to intervene when financial institutions face distress, including appointing management, restructuring, or liquidation.

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— Central Bank of the UAE (@centralbankuae) October 11, 2025

New law gives CBUAE more authority and bolsters consumer protection

To bolster consumer protection, the law consolidates complaints processes for banks and insurers under the independent body Sanadak. It creates specialised judicial committees whose rulings are final and enforceable for disputes up to Dhs100,000.

It also mandates that credit facilities must align with customers’ income to discourage irresponsible lending practices.

Early intervention powers allow regulators to require recovery plans, impose higher capital or liquidity requirements, alter business strategies, or take direct control of failing entities.

The law raises administrative fine limits — penalties can reach up to 10 times the value of the violation or unjust enrichment, automatically debited from accounts held with the CBUAE or licensed institutions.

Reconciliation with violators prior to final judicial decision is permitted, and fine decisions may be published to enhance transparency.