The Central Bank of the United Arab Emirates (CBUAE) has suspended a UAE-based bank from onboarding new customers through its Islamic Banking Window for a period of six months. The regulatory action also includes a financial penalty of AED3,502,214 (approx. $953,000).
This decision follows supervisory findings from the Central Bank’s Sharia compliance examinations, which uncovered multiple violations related to Sharia Governance under the Decretal Federal Law No. (14) of 2018 on the Organisation of Financial Institutions and Activities and its subsequent amendments.
Action Taken Under Legal Framework
The suspension and financial sanction are in accordance with Article 137 of the Decretal Federal Law No. (14) of 2018, reinforcing the Central Bank’s authority to enforce compliance among financial institutions operating within the country.
The violations pertain specifically to non-compliance with the regulatory instructions governing Islamic finance operations, including internal Sharia controls, reporting, and overall adherence to Islamic banking standards set by the UAE’s central regulatory authority.
Commitment to Sector Integrity
The CBUAE reaffirmed its dedication to ensuring that all banks, including Islamic windows and their staff, strictly follow the laws, regulations, and governance frameworks established to uphold the integrity and transparency of the UAE’s financial system.
In a statement, the Central Bank emphasized that its supervisory and regulatory mandates aim to protect financial stability, promote ethical banking practices, and safeguard the reputation of the UAE as a compliant and transparent financial hub.
