President His Highness Sheikh Mohamed bin Zayed Al Nahyan has issued Federal Decree Law No. (6) of 2025 concerning the Central Bank, the regulation of financial institutions and activities, and insurance operations.
The new law reflects the UAE’s ongoing commitment to streamlining legislative and supervisory frameworks across its financial sector. It aims to reinforce the Central Bank’s independence, enhance the stability of the national financial system, and align regulations with leading international standards. Through this, the UAE continues to bolster its global competitiveness while maintaining long-term monetary stability.
Expanding the Central Bank’s Mandate
The decree law defines the core functions of the Central Bank, which include establishing and implementing monetary policy, supervising licensed financial activities, and issuing regulatory standards for sound financial practices. It also assigns the Central Bank responsibility for managing foreign reserves, ensuring coverage of the monetary base, and supporting sustainable financing practices guided by strong governance principles.
In addition, the law highlights the Central Bank’s role in risk monitoring, financial infrastructure development, and market oversight. These expanded responsibilities are designed to strengthen the UAE’s ability to respond to global economic challenges and safeguard its financial system against potential shocks.
The legislation further advances financial inclusion and consumer protection. Licensed institutions are required to ensure accessible banking and financial services for all community members, in line with national digital transformation efforts. It also calls for awareness campaigns to promote financial literacy and responsible practices across the country.
Enhancing Oversight, Protection, and Crisis Management
The law introduces several provisions aimed at improving financial governance and customer protection. It consolidates complaint resolution under Sanadak, an independent entity that manages disputes involving banks and insurance companies. Decisions made by specialised judicial committees—established under the new framework—will be final and enforceable for claims up to AED 100,000.
To ensure early detection of financial risks, the decree law empowers the Central Bank to take proactive measures such as requiring recovery plans, adjusting capital requirements, modifying business structures, or even assuming temporary control of an institution. It also authorises interventions like mergers, acquisitions, or liquidations to maintain financial stability.
As the designated Resolution Authority, the Central Bank gains authority to manage financial crises effectively. It can appoint or remove management, transfer or sell assets, restructure capital, and oversee the continuation of essential services during crises. Furthermore, the decree law raises administrative fine ceilings, allowing proportional penalties of up to ten times the violation’s value. This ensures accountability and reinforces market transparency, with the Central Bank authorised to publish penalty decisions on its official website.
Through these comprehensive measures, the Federal Decree Law strengthens the UAE’s financial governance framework and reinforces its position as a trusted global financial hub committed to resilience, transparency, and sustainable growth.
