Daijiworld Media Network - Abu Dhabi

Abu Dhabi, Jun 26: The Central Bank of the UAE (CBUAE) has imposed strict penalties on a UAE-based bank for failing to comply with Sharia governance standards, a core requirement for Islamic banking in the country. The punitive measures include a six-month ban on onboarding new customers and a financial penalty amounting to Dh3,502,214.

In a statement issued on Thursday, the CBUAE said the sanctions followed supervisory examinations that uncovered multiple violations, specifically relating to the Sharia Governance Framework. Additional breaches of legal and regulatory provisions applicable to financial institutions were also identified.

The enforcement action has been taken under Article 137 of Decretal Federal Law No. (14) of 2018, which grants the CBUAE authority to regulate, supervise, and, where necessary, discipline financial entities operating in the UAE. This law explicitly includes oversight of Islamic banking practices.

While the Central Bank did not name the penalised bank, it made clear that the violations were directly tied to deficiencies in Sharia compliance — a non-negotiable component of operating Islamic financial services in the UAE.

Reaffirming its stance on regulatory integrity, the CBUAE underscored its dedication to enforcing transparency and legal adherence across the banking system. “The CBUAE remains committed to ensuring that all licensed financial institutions operating in the UAE adhere to the legal and regulatory standards established to uphold transparency and integrity in the banking sector,” the statement noted.

This disciplinary action is part of the Central Bank’s broader mandate to safeguard financial stability and reinforce public confidence in the sector. By holding institutions accountable, the regulator aims to protect the reputation and reliability of Islamic banking services in the country.