UAE’s Central Bank Issues New Regulation for Specialized Banks

Business

May 2nd, 6:50am

Abu Dhabi - Asharq Al-Awsat

The Central Bank of the UAE (CBUAE) issues a new regulation concerning specialized banks. (Asharq Al-Awsat)

The Central Bank of the UAE (CBUAE) has issued a new regulation covering licensing, prudential and conduct requirements for specialized banks. The objective of the new regulation is to provide a regulatory framework in which specialized banks can operate in the UAE financial sector in a "robust and prudent manner,” the CBUAE said in a statement. Specialized banks are allowed to conduct their activities in the UAE Dirhams only and operate according to a low credit risk model, said the statement. They can be established either as a conventional specialized bank without Sharia-compliant offerings, or as a specialized Islamic lender, the regulator said. Banks are licensed under the CBUAE’s new regulation and are allowed to practice different financial activities to serve the local community, such as account opening, card issuance, and retail and wholesale lending. They are permitted to provide services to UAE nationals and UAE residents only. The regulation sets a minimum paid-up capital requirement of AED300 million (USD81.6 million) that specialized banks must maintain and a risk-based capital adequacy requirement that they should continuously adhere to, the banking regulator said Saturday. It also sets the total consolidated assets of specialized banks at a maximum of AED25 billion (USD6.8 billion). "The CBUAE stresses the importance of specialized banks’ compliance with all regulations, standards and notices issued for the banking sector, except where there are specific provisions contained in the new regulation which apply to specialized banks only," the central bank said.

from Asharq AL-awsat https://english.aawsat.com/home/article/2950651/uae%E2%80%99s-central-bank-issues-new-regulation-specialized-banks