The UAE’s government has passed a new law raising the Central Bank and allowing the establishment of a general reserve of up to four times paid-up capital, it was announced on Sunday.
The law – federal law No. 14 of 2018 – raises the CBUAE’s capital to AED 20 billion and sets three primary objectives for the bank, including protecting the stability of the UAE’s financial system, ensuring prudent management of foreign reserves and maintaining the stability of the dirham.
“This new law is expected to enhance the performance of monetary policy and ensure the stability of the currency in the state, and shall contribute to the establishment of better regulatory frameworks for monitoring the status of credit in UAE, and, hence, ensure the achievement of balanced growth in the national economy,” said His Highness Sheikh Hamdan bin Rashid, Deputy Ruler of Dubai and Minister of Finance.
Sheikh Hamdan added that “the law facilitates development of the supervisory framework, along with the disclosure, compliance procedures and governance in the Central Bank operations.”
“The law shall enhance monetary performance and boost confidence in the national economy,” he said.
The governor of the CBUAE, Mubarak Rashed Al Mansoori, said that the new law includes a number of new provisions relating to enforcement, good governance, financial infrastructure oversight and the enforcement of consumer protection.
Additionally, the law strengthens the Central Bank’s powers to impose a range of administrative, financial sanctions and penalties on licensed financial institutions that are in violation of the provisions of this law, and gives CBUAE staff to have the capacity of judicial officers.
As part of the new law, an independent committee – the grievances and appeals committee – will be established under the chairmanship of a court of appeal judge. The committee will have exclusive jurisdiction to decide on grievances and appeals against any decision by the CBUAE related to licensing, authorisation of individuals, and licensing and designation of financial infrastructure systems.
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