News and developments
New Amendments to the UAE Banking Law: Enhancing Efficiency and Stability
One significant development is the amended Federal Decree-Law No. 14/2018 on the Central Bank and the Organisation of Financial Institutions and Activities, which introduces important amendments to the UAE Banking Law. These amendments enhance the efficiency, transparency, and stability of the banking sector, aligning with global best practices while addressing local economic needs.
Overview of New Amendments: Federal Decree-Law No. 14/2018:
Federal Decree-Law No. 14/2018 represents a comprehensive reform initiative aimed at updating the regulatory framework governing banks and financial institutions in the UAE. It builds upon existing regulations to adapt to developing market changing aspects, technological advancements, and international standards.
Key Amendments and Implications:
Revised Definition of Transfer Order: The newly amended Article 1 of the UAE Banking Law under Federal Decree-Law No. 14/2018 introduces a revised definition of Transfer Order within Financial Infrastructure Systems, which includes:
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- Instructions by a participant to transfer funds to another participant within a settlement system.
- Putting funds under a participant's control according to the rules of a financial system.
- Instructions to release a party from payment obligations as per the settlement system's rules.
- Instructions to settle obligations by transferring securities.
- Instructions that result in taking on or releasing a party from payment obligations for retail transactions.
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- Accounts in the national currency or foreign currencies for licensed financial institutions, accepting deposits, and managing interests.
- Accounts for monetary authorities, other central banks, foreign banks, international financial and monetary institutions, and Arab and international monetary funds.
- Any other accounts within the limits and according to the rules set by the Board of Directors.
- Maintenance of digital currency financial balances as deemed appropriate by the Board of Directors.
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- Only the Central Bank can issue currency.
- Currency notes and digital currency issued by the Central Bank are considered legal tender with absolute legal force.
- Currency coins have legal tender force for payments up to AED fifty, with the Central Bank accepting larger amounts without limitation.