After nearly 40 years, the statute that governs the UAE Central Bank (\’UAECB\’) and the banking industry in the UAE has been amended. The Federal Law No. 14 of 2018 on the Central Bank and the Organization of Financial Institutions and Activities (the \”Law\”), which was published in the Official Gazette on September 30, 2018, repealed and replaced the 1980 Union Law and is presently in effect.

Two of the UAE\’s former banking regulations are repealed by the New UAE Banking Law. The first is Federal Law No. 10 of 1980, which establishes the status of the UAE Central Bank (the \”UAECB\”) and its responsibilities for administering the currency and monitoring the activities of banks and financial institutions (the \”1980 Banking Law\”). The second is Federal Law No. 6 of 1986, which governs Islamic banking operations. Despite the fact that the New UAE Banking Law is a fundamental rewrite of the statutory scheme for banking in the UAE, the powers conferred on the UAECB by the New UAE Banking Law are being used to keep existing UAECB regulations and circulars in place until they are replaced in the three-year period ending September 29, 2021.

The Law\’s introduction is a positive legislative step in the UAE because it strengthens the UAE Central Bank\’s ability to exercise effective regulatory control over the financial industry following worldwide best practices and standards.