On the 16th of September 2025 a new consolidated banking law, being the Federal Decree Law No. 6 of 2025 (the New CBUAE Banking Law), came into effect.
The New CBUAE Banking Law has the effect of repealing any conflicting provisions in the previous Federal Decree Law No. 14 of 2018 (the Old CBUAE Banking Law) as well as the Federal Decree Law No. 48 of 2023: Regulating Insurance Activities.
To understand the regulatory implications of the New CBUAE Banking Law a summary of its key provisions is set out below.
Penalties and expansion of enforcement powers
The New CBUAE 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.
The CBUAE has effectively been designated a resolution authority with the ability to intervene early, appoint or remove management, and recover funds. Collectively, these measures show an inclination towards a stricter regime focused on the protection of consumers and maintaining the financial market stability.
Establishment of grievances and appeals committee
Complementing the expanded enforcement powers, the New CBUAE 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 CBUAE 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, APIs, 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 CBUAE Banking Law, is retained under the New CBUAE Banking Law with expanded powers and, most significantly, binding authority for matters related to Islamic Finance.
For Islamic financial institutions, the New CBUAE Banking Law also expands regulatory oversight to include digital and fintech financial services and provides more stringent rules on product transparency.
Insurance
The New CBUAE Banking Law now includes detailed insurance provisions. Both conventional and Takaful (Islamic insurance) 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 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
Institutions falling under the scope of the New CBUAE 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
Ultimately, the new regime marks a shift towards a more globally aligned regulatory framework by introducing major changes to the existing regime, including enhanced penalties and resolution mechanisms, 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 and Finance team for further information.
