A new consolidated banking law being the Federal Decree Law No. 6 of 2025 Regarding the Central Bank, Regulation of Financial Institutions and Activities, and Insurance Business (the New Banking Law) was issued by the President of the United Arab Emirates (the UAE) on 8 September 2025. The New Banking Law was published in the official gazette on 15 September 2025 and has come into effect from 16 September.
The New Banking Law repeals and replaces the previous Federal Decree Law No. 14 of 2018 (the Old Banking Law) as well as the Federal Decree Law No. 48 of 2023 Regulating Insurance Activities (the 2023 Insurance Law) and any provision of applicable laws in the UAE contravening or conflicting with its provisions.
The New Banking Law aims to consolidate and streamline the regulation of banks, financial institutions, and insurers under the Central Bank of the UAE (the CBUAE). Key updates include the introduction of a formal early intervention and resolution framework, and the establishment of a digital money and payments system, which supports the Digital Dirham as part of the CBUAE’s broader Financial Infrastructure Transformation (FIT) initiative, modernising the UAE’s payment and cross-border transaction systems.
Similar to the 2018 Law, the New Banking Law does not apply to financial free zones within the UAE.
To understand the regulatory implications of the New Banking Law, a summary of its key provisions is set out below:
Early intervention
The New Banking Law grants the CBUAE the authority to intervene early and resolve stress in financial institutions swiftly when necessary. Building on the Recovery Planning Regulation issued by the CBUAE on 30 October 2023, it provides the CBUAE with comprehensive powers to manage recovery and resolution, including implementing recovery measures, imposing capital or liquidity requirements, establishing interim governance arrangements, removing management, and facilitating mergers or acquisitions. To facilitate resolution, the CBUAE can, amongst other things, appoint administrators, transfer assets, write down liabilities, create bridge institutions, impose bail-ins, and enforce temporary stays and moratorium, with clear creditor hierarchies and tailored resolution powers.
Interplay with the Bankruptcy Regime
The UAE Bankruptcy Law (Law No. 51 of 2023) excludes banks, financial institutions, and insurance companies licensed by the CBUAE from its scope, as these entities are meant to be governed by special legislation for preventive settlement, restructuring, and bankruptcy. This effectively removes such institutions from the general bankruptcy framework, deferring to sector-specific rules.
The New Banking Law introduces a detailed early intervention and resolution framework for licenced financial institutions, granting the CBUAE authority and tools to manage such resolution. This framework could likely constitute the "special legislation" referenced in the UAE Bankruptcy Law carve-out.
While the New Banking Law allows for court-supervised liquidation or bankruptcy when deemed necessary by the CBUAE, such processes will be coordinated within the sector-specific framework. It is still early to assess the full impact of the CBUAE’s new resolution powers on the bankruptcy regime and their implications.
Penalties
The New Banking Law strengthens the enforcement regime by increasing the penalty threshold from AED 200 million to AED 1 billion for violations. The maximum fine for individuals has also risen from AED 2 million to AED 5 million. Additionally, the CBUAE is empowered to issue an order of forfeiture of illegal gains to customers and fines may be immediately enforced and auto-debited from accounts or guarantees.
Establishment of Grievances and Appeals Committee
Complementing the expanded enforcement powers, the New Banking Law introduces a grievance and appeals committee, an independent body with exclusive jurisdiction to review the orders made by the CBUAE.
The establishment of an independent and exclusive committee signals greater accessibility, efficient resolution of concerns raised by regulated entities, and greater confidence in the financial market of the UAE.
Increased scope and digital finance
Article 62 of the New Banking Law significantly broadens the scope of financial regulation, requiring any person or entity that carries on, offers, issues or facilitates a Licensed Financial Activity to be licensed and regulated by the CBUAE irrespective of the medium, technology or form used.
As a result, the scope of regulated entities expands beyond traditional financial institutions to include technology platforms, application programming interface, decentralised applications and other emerging technology which enable or facilitate the provision of financial services under the regulatory and licensing regime of the CBUAE.
Consequently, businesses with non-traditional business models previously assumed to be outside the regulatory perimeter must now reassess their standing.
Islamic Finance
The Higher Shari’a Authority (the HSA), established as an advisory entity under the Old Banking Law, is retained under the New Banking Law with expanded powers and, most significantly binding authority for matters related to Islamic Finance.
For Islamic financial institutions, the New Banking Law also expands regulatory oversight to include digital and fintech financial services and provides more stringent rules on product transparency.
Insurance
The New Banking Law now includes detailed insurance provisions. Both conventional and Takaful insurers are now directly supervised and licensed by the CBUAE, subject to similar requirements as other financial institutions. Insurance policyholders also benefit from access to increased protections.
ESG
Financial institutions will now be required to incorporate environmental, social and governance (ESG) factors into their risk management processes and engage in transparent ESG reporting and disclosures.
Institutions operating in the UAE will need to review their internal policies to ensure alignment with CBUAE expectations and establish processes for all disclosure requirements.
Transitional period
Existing regulations, decisions, standards, guidelines, and circulars under the Old Banking Law and 2023 Insurance Law remain effective until explicitly replaced.
Institutions falling under the scope of the New Banking Law have a one-year transitional period from the law's effective date to achieve compliance.
Businesses across financial and insurance sectors should use this period to review the new and expanded regulatory/licensing/supervisory scope, determine if their activities are now included, and update licenses, authorisations and internal processes to meet CBUAE requirements.
Looking forward
In the coming year or so, the CBUAE is expected to release additional regulations and guidance clarifying the scope, licensing, and compliance requirements under the New Banking Law.
Ultimately, the new regime marks a shift towards a more globally aligned regulatory framework by introducing major changes to the existing regime, including early intervention by the CBUAE for resolution of stress in the system, enhanced penalties, increased scope, stricter financial supervision, and more. The approach signals an expansion of the regulatory perimeter – one that aims to achieve and maintain financial stability and integrity while showcasing innovation and global realignment.
With decades of experience in the UAE and a deep understanding of the regulatory framework, our local and international experts are well placed to guide businesses in meeting the new CBUAE requirements. Please get in touch with our International Banking & Finance team for further information.
