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CBUAE Regulatory Entity

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The Central Bank of the United Arab Emirates, CBUAE, was founded in 1980 and is one of the leading financial regulatory bodies in the UAE. The agency supervises and monitors all financial processes within the country.

UAE regulatory entities are responsible for ensuring the powerful and sustainable growth of the UAE’s economy.

Historical background

The currency board was the central financial regulatory authority of the UAE before the Central Bank was established. However, the board did not have the same power as the Central Bank.

It was primarily responsible for managing currency and maintaining foreign exchange and gold reserves.

After establishing the Banking Supervision Department in 1978, the Research and Statistics Centre was established in 1974. On 10 December 1980, Union Law No.10 was finally passed, after which the Central Bank of the UAE was founded.

The UAE banking system experienced a major change after 1980. A separate Anti-Money Laundering and Suspicious Case Unit (AMLSCU) was established in 1998 to handle fraud cases.

The department was established by H.E. Sultan Bin Nasser Al Suwaidi, the Central Bank governor, in 1991.

In 2000, the National Anti-Money Laundering Committee was established. In 2009, the Financial Stability Unit was also created. A Regulatory Development Division was established in 2012, with which the first report on Financial Stability was written.

A new set of regulations was introduced in 2014 by the Governor, H.E. Mubarak Rashed Al Mansoori. In addition, the State Bank of UAE also issued Decretal Federal Law No #14 for monitoring the major activities of various financial bodies based in the UAE in 2018.


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Main objectives

The UAE Central Bank Regulatory Entity is also concerned about financial stability and boosting the growth of the UAE economy, as we have already mentioned.

Therefore, for improving the financial and monetary stability, effective supervision and regulation are conducted. As a result, a powerful financial structure can be created using international best practices and improved standards.

By staying within the framework of the monetary system, maintain high stability for the national currency. Furthermore, proper protection and promotion are provided to maintain and stabilise the entire financial system in the state.

Numerous institutions are licensed by the Central Bank. This includes national banks, finance companies, foreign banks, investment companies, representative offices, money exchanges and financial brokers.

Laws & regulations

There is a compliance book made by the Central Bank of the UAE, which all the financial institutions should abide by to get registered. Furthermore, they are responsible for managing the UAE’s credit policy. Therefore, the Central Bank of the UAE passes all the regulations just to pertain to the financial bodies which fall within the authority’s jurisdiction.

The central bank is designing the regulations for the:

  • Governance
  • Capital
  • Liquidity
  • Risk Management
  • Controls and Compliance
  • Credit risk
  • Anti-money laundering (AML)

Banks in the UAE operate in two different categories. First, the National Banks are public shareholders that work according to Union Law No.10 of 1980. Second, licensed by the Central Bank, foreign banks can conduct various operations within the country.

However, these operations must be conducted under legal guidelines that are defined by the Central Bank.

Role of banking supervision and examination department

Banking supervision and examination is one of the major departments of the UAE banking system. The department is responsible for overseeing the proper regulatory oversight and keeping track of all activities taking place inside the UAE banking industry. The supervisory and examination department has worked in various fields.

All included local banks, finance companies, foreign banks operating within the UAE, exchange houses, non-banking institutions, and payment service providers.

Also, the department is responsible for issuing licenses to banking institutions. As a result, international standards are set for the banking system, and the system is regulated properly. As well as monitoring compliance, they also provide support.

Furthermore, the department has also been responsible for the liaison and the cooperation of international standards bodies and banking organisations. The Bank for International Settlements, the Financial Action Task Force, and the International Monetary Fund or World Bank are among these.

What operations are performed by banking departments?

Different tasks under their services are also handled by the department of banking operations. The UAE currency is managed in phases. Security features, design, technical specifications, counting, fitment, sorting, and quality assurance are all included.

Additionally, they issue commemorative coins following the Central Bank’s policies and procedures. The Central Bank owns the entire clearing, payment, and settlement system. Through the support of participants, they are contributing towards improving the system.

A bank’s management is also responsible for managing the financial market infrastructure through regional and international payment systems. The banking departments also handle banking relationships with other international entities and keep a record of transactions.

What is the role of the internal audit department?

CBUAE’s internal audit provides objective assurance and offers consulting services aimed at improving its operations.

Their main mission is to improve and secure the value of organisations by providing risk-based and objective assurance, advice, and greater insight.

By managing the structure of corporate governance, they ensure the achievement of objectives and risk management. Internal audit serves as a defence mechanism to enhance risk management, governance, and internal control.

There is also a major department controlling and supervising all the finances. The financial department plays a major role in supporting and overseeing the major deployment of all financial resources.

They handle accounting and reporting, perform financial planning, carry out vendor and staff payments, engage in treasury operations and settlement and monitor cash management.

Bottom line

To end with, The Central Bank of the UAE has strong powers through which it manages and issues the currency for the stability of the country’s currency. Furthermore, they are responsible for managing the UAE’s credit policy, overseeing and developing the UAE’s banking system.

The UAE Central Bank serves as the government’s principal banker, providing financial and monetary support to all levels of government.

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