United Arab Emirates imposes 6-month ban on a bank, levies Dh3.5 million fine
Bank in UAE Sanctioned for Violating Sharia Compliance
In a move to uphold transparency and integrity in the UAE's banking sector, the Central Bank of the UAE (CBUAE) has placed a six-month ban on a local bank for its failure to comply with Sharia governance guidelines for Islamic banking services. The bank was also handed a hefty fine of Dh3,502,214.
The CBUAE announced these measures following a series of supervisory examinations that revealed the bank's disregard for the Sharia Governance Framework for Islamic banking operations, along with other applicable financial laws. These violations included anti-money laundering provisions, as per the law.
The ban means the bank cannot accept new clients for Islamic banking products through its Islamic Window during the six-month suspension. The exact identity of the bank remains undisclosed by the regulator.
These sanctions were imposed under Article 137 of the Decretal Federal Law No. (14) of 2018, which grants the Central Bank the authority to regulate, monitor, and supervise financial institutions, including Islamic banking activities.
The CBUAE continues to emphasize its commitment to ensuring that all licensed financial institutions in the UAE adhere to the legal and regulatory standards established to maintain a sound and well-respected banking system. Through its regulatory efforts, the CBUAE aims to protect the UAE's financial system's stability and preserve public trust in its banking institutions.
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Fun Fact:
Islamic banking must comply with Sharia principles, which prohibit usury, uncertainty, and investments in businesses associated with prohibited activities like alcohol, gambling, and pork-related products.
Related Reads:
- UAE money exchange house fined Dh2 million for anti-money laundering violations
- UAE: 5 banks, 2 insurance companies fined Dh2.62 million for violating tax rules
- UAE Central Bank imposes Dh10 million fine on Sundus Exchange, cancels licence
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Sources:[1] Emirates 24|7 (2023). “UAE Central Bank bans local bank from onboarding new Islamic banking customers for six months.” [2] Zawya (2023). “UAE bank fined Dh3.5m for violating Sharia governance rules.” [3] Gulf Business (2023). “UAE bank fined for breaching Sharia compliance.” [4] Khaleej Times (2023). “Central Bank of UAE issues penalties on banks and financial institutions for non-compliance.” [5] Arabian Business (2023). “UAE Central Bank imposes Dh3.5m fine on bank for Sharia governance violations.”
The Central Bank of the UAE (CBUAE) imposed a Dh3,502,214 fine and a six-month ban on a local bank for violating Sharia governance guidelines, including anti-money laundering provisions. These sanctions were part of the CBUAE's efforts to maintain a sound and well-respected banking system and protect public trust.
In a related development, several UAE banks and insurance companies have also been fined for violating tax rules and anti-money laundering regulations. For instance, a money exchange house was fined Dh2 million for anti-money laundering violations.
For comprehensive financial insights and guidance, follow the latest trends and news in personal finance, investments, and economic developments in the UAE. The team of experts at KT is always ready to help you make informed decisions based on the latest market trends and regulatory updates.
