The President of the State issues a federal decree law regarding the Central Bank and the regulation of financial establishments, activities, and insurance businesses

His Highness Sheikh Mohammed bin Zayed Al Nahyan, President of the State, may God protect him, issued Federal Decree Law No. (6) of 2025 regarding the Central Bank and the regulation of financial establishments, activities, and insurance businesses, as part of the UAE’s ongoing efforts to modernize the legislative and supervisory framework for the financial sector, and enhance its stability, efficiency, and competitive ability, in a way that consolidates the compatibility of the national system with the highest international standards. It enhances the independence of the Central Bank and its pivotal role in achieving financial and monetary stability.

The decree-law aims to maintain the stability of the national currency, enhance and protect the stability of the financial system, and rational management of the state’s foreign currency reserves. It also defines the basic tasks of the Central Bank, foremost of which is setting and implementing monetary policy, regulating and supervising licensed financial activities in accordance with international standards, issuing regulations and standards to ensure fair and effective financial practices, and maintaining reserves. Sufficient foreign currency to cover the monetary base, support sustainable financing, integrate governance principles, monitor and analyze systemic risks, and develop and supervise financial market infrastructure.

In the field of customer protection and financial inclusion, the decree law establishes an integrated system that obliges licensed financial institutions to enable all segments of society to access appropriate banking and financial services, in keeping with digital transformation and innovation in financial services. It also sets frameworks for national awareness programs in cooperation with the financial sector and community institutions, and confirms the continuation of positive practices previously in place. Especially with regard to aligning credit facilities with the client’s income and protecting him from irresponsible practices.

The decree law strengthens the customer protection and dispute settlement system by unifying the process of complaints for customers of banks and insurance companies under an independent umbrella (SANDAC) to receive and settle complaints, and establishing specialized judicial committees to adjudicate disputes arising from financial activities, provided that the committees’ decisions are final and effective on licensed financial institutions within a limit of 100 thousand dirhams.

The decree law also includes proactive measures for early intervention to address any indicators of deteriorating financial conditions in a licensed facility, to ensure financial stability and customer protection, including activating recovery plans, imposing additional capital and liquidity requirements, amending the strategy and administrative and operational structure, appointing temporary committees or direct management of the facility, and taking merger, acquisition or Liquidation when necessary, and applying special procedures to insurance companies if their conditions are not corrected.

According to the decree law, the Central Bank, as the settlement and resolution authority, plays a major role in managing financial crises by dismissing and appointing new departments, recovering rewards, appointing guardians to manage the facility and its assets, amending or terminating contracts, transferring or selling assets and liabilities, canceling shareholders’ rights, restructuring capital, creating temporary entities to manage assets, or continuing vital services, and implementing… Organized liquidations or rescue operations to ensure the continuity of vital activities.

In terms of administrative penalties, the decree law stipulates raising the ceiling of administrative fines in proportion to the gravity of the violations and the volume of transactions, allowing the Central Bank to impose a proportional fine of up to ten times the value of the violation or illicit enrichment, implementing fines automatically from the balances of violators with the Central Bank or financial institutions, and the possibility of reconciliation with violators before the issuance of final judicial decisions, in addition to the possibility of Publish the sanctions on the official website of the Central Bank, which enhances transparency and discipline in the market.