UAE President Sheikh Khalifa bin Zayed Al Nahyan has issued a Federal Law regarding the “Central Bank and Organization of Financial Institutions and Activities.”
The provisions of this law does not apply to the Financial Free Zones in the State and the financial institutions regulated by the authorities of those zones, a statement carried on Emirates News Agency said Sunday.
“This new law is expected to enhance the performance of monetary policy and ensure the stability of the currency in the State, and shall contribute to the establishment of better regulatory frameworks for monitoring the status of credit in UAE and, hence, ensure the achievement of balanced growth in the national economy. In that, the law facilitates development of the supervisory framework, along with the disclosure, compliance procedures and governance in the Central Bank operations. The law shall enhance monetary performance and boost confidence in the national economy,” said Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance.
The Finance Ministry is collaborating with all competent authorities in the UAE to ensure coordination between fiscal and monetary policies, as well as developing sound fiscal policies and clear procedures for management of public funds, in line with the highest standards of efficiency and transparency, he said.
“The Ministry shall also continue its efforts to improve fiscal performance and to enhance levels of compliance and revenue diversification in such way as to boost UAE’s competitiveness and attractiveness as a global business hub,” he added.
Sheikh Hamdan said the law would enhance the Central Bank’s ability to regulate financial activities, and determine the standards required for the development and improvement of prudential measures in accordance with best international practices. The law also grants the Central Bank powers to better manage foreign reserves by holding adequate foreign currency reserves in all times. Moreover, it helps with monitoring the credit status in the UAE towards achieving balanced growth in the national economy.
Central Bank Governor Mubarak Al Mansoori praised the new law, describing it as a “significant step towards comprehensive development of the financial sector in the UAE and reinforcement of Central Bank’s independence and regulatory powers.”
“This will promote effective control over the financial sector in line with international best practices and standards,” he said.
He stated that “the law includes a number of new provisions relating to enforcement, good governance of financial institutions licensed by the Central Bank, oversight of the financial infrastructure in the UAE, in addition to encouragement of fair competition and enforcement of costumer protection."
The new law strengthens CBUAE’s enforcement powers to impose a broad range of administrative, financial sanctions and penalties on licensed financial institutions that are in violation of the provisions of this law.
It authorizes CBUAE staff, designated per decision issued by the Minister of Justice in coordination with the Governor, to have the capacity of judicial officers. This gives CBUAE capacities to verify and penalize any violations of the law’s provisions.
Further to the new enforcement powers granted to CBUAE, an independent committee, named "Grievances and Appeals Committee" will be established under the chairmanship of a court of Appeal judge. The Committee shall have the sole and exclusive jurisdiction to decide on grievances and appeals against any decisions by CBUAE related to licensing, authorization of individuals, and licensing and designation of financial infrastructure systems.
