Banking Law

• Central Bank of the UAE: In the United Arab Emirates, a Central Bank is known as the Central Bank of the United Arab Emirates. The Bank is considered a public institution, having its body corporate and enjoying the required judicial capacity to conduct all operations and dealings that ensure the attachment of the objectives for which it has been established.

• The Bank’s operations, balance sheet, and accounts are organized according to commercial banking principles. The Bank’s dealings with other parties are also considered commercial.

• None of the provisions of the Laws governing public tenders and auctions, public accounts, and civil service, other than the Bank’s own regulations, apply to the Bank.

• The pre-audit provided for in Law No. (7) of 1976, establishing the State Audit Institution, does not apply to the Bank’s operations. The Audit Institution limits itself to post-auditing the Bank’s operations and has no right to interfere in conducting the Bank’s operations or policies. 

• The Bank directs the monetary, credit, and banking policy and supervises its implementation in accordance with the State’s general policy, helping to support the national economy and stability of the currency. 

For the attainment of its objective, the Bank can:

• Exercise the privilege of currency issues in accordance with the provisions of this Law.
• Endeavor to support the currency, maintain its stability internally and externally, and ensure its free convertibility into foreign currencies.
• Direct credit policy in such ways as to help achieve a steady growth of the national economy.
• Organize and promote banking and supervise the banking system’s effectiveness according to this Law’s provisions.
• Undertake the functions of the Bank of the Government within the limits prescribed in this Law.
• Advise the Government on financial and monetary issues.
• Maintain the Government’s reserve of gold and foreign exchange.
• Act as the banks operating in the Country.
• Act as the State’s financial agent at the International Monetary Fund, the International Bank for Reconstruction and Development, and other international Arab Funds and Institutions and carry out all state dealings with such concerns.

• A commercial bank is any institution that customarily receives funds from the public in the form of demand, under notice, or time deposits or which places debt instruments or deposits certificates to be used, in whole or in part, for its accounts and, at its risk, for granting loans and advances.

• Commercial banks also carry out operations relating to the issue and collection of checks, placing public or private bonds, trade in foreign exchange and precious metals, or any other operations allowed for commercial banks either by law or by customary banking practice. 

• The Board of Directors of the Central Bank defines the activity and operation requirements of commercial banks with restricted banking licenses. In application of the provisions of this Law, such banks are treated as commercial banks unless the Board of Directors excludes them from some provisions or measures.

• For the purposes of enforcement of this Law and unless otherwise provided by law, all branches of any bank operating in the United Arab Emirates are regarded as one bank.