NEW UAE CENTRAL BANK LAW FURTHER BOOSTS FINANCIAL STABILITY AND CUSTOMER PROTECTION

President Sheikh Mohamed has issued a new law that further enhances the role of the UAE Central Bank to boost financial stability and protect its constituents.

The legislation, Federal Decree Law No (6) of 2025, is set to strengthen the central bank’s independence and vital role in ensuring financial and monetary stability, the UAE Government Media Office said on Friday.

Its seven points include a mandate for all financial institutions to provide banking services to everyone, in line with digital transformation and financial service innovation efforts, it said.

It also aims to maintain the stability of the dirham, promote and protect the stability of the financial system.

The law also seeks to enhance consumer protection by unifying complaints and dispute services for banks and insurance companies, and establish protective measures for intervention and early settlement.

For penalties, the law increases administrative fines by up to 10 times, depending on the gravity of violations; fines will also be automatically debited to allow reconciliation before final judicial rulings.

Licensed financial institutions must also obtain and keep adequate guarantees for all types of facilities provided to natural persons and sole proprietorship customers, it said.

The decree is “part of the UAE’s continuous efforts to streamline the legislative and supervisory frameworks of the financial sector, enhance its stability and competitiveness and align the UAE’s financial ecosystem with the highest international standards”, the media office statement said.

“The central bank, as the ‘Resolution Authority’, plays a key role in managing financial crises. It has the power to remove and appoint the management of financial institutions and recover monies from responsible persons,” it said.

“It also has the power to appoint guardians tasked with managing the institution and its assets, terminate or close out contracts, transfer or sell assets and obligations, override rights of shareholders, restructure the capital, establish temporary entities to manage assets or continue providing key services, carry out an organised liquidation or bailout to ensure the continuity of critical functions.”

The UAE continues to boost its financial sector, which is one of the key pillars of its economy.

Last month, the UAE Central Bank increased its 2025 growth forecast for the country’s economy from 4.4 per cent to 4.9 per cent, as a surge in non-oil activity drives momentum.

The regulator had also lowered its benchmark interest rate last month, mimicking the US Federal Reserve’s move to cut its policy rate. It cut the base rate applied to its overnight deposit facility by 25 basis points to 4.15 per cent, from 4.40 per cent.

2025-10-10T09:31:27Z