Central Bank of the UAEchapter by chapter

Article 6.1-6.4

Juridical persons must apply for a Central Bank License with detailed documentation to conduct financing activities in the UAE.

Article 7.1

Licensees must begin licensed activities within 12 months of receiving approval notification.

Article 7.2

Finance companies must apply for licence renewal at least two months before expiry; licences run three-year terms, renewable unless the Central Bank requires otherwise.

Article 9.3

A Finance Company must apply to the Central Bank at least six months in advance, giving reasons, before ceasing or suspending any licensed activity.

Article 10.4, 10.5

Finance companies may accept deposits and issue certificates of deposit only from juridical persons, and foreign funding must be hedged and capped at 25% of aggregate funding plus deposits.

Article 10.6, 10.7, 10.9

A finance company must update its licence for activities outside its scope and obtain Central Bank no-objection before new products or agent partnerships for short-term credit.

Article 10.13-10.16

A Finance Company may hold shares in brokerages, money exchangers, UAE Banks and other Finance Companies, capped at 10% per investee; deposits must span at least four banks.

Article 10.17-10.20

Finance companies need Central Bank approval before issuing bonds or sukuks, may not finance non-UAE borrowers or non-UAE secured deals, cannot engage in money exchange or unhedged FX, and may acquire property only for operational premises.

Article 11.3, 11.4

A finance company must maintain minimum paid-up capital of AED 150 million net of accumulated losses and goodwill, and submit an approved rectification plan within 30 days of any shortfall.

Article 11.5, 11.6

Finance companies must keep at least 60% of paid-up capital in UAE national ownership and cap aggregate liabilities at 100% of capital funds initially, rising to 700% by year ten.

Article 11.7-11.9

Finance Companies must allocate 10% of annual net profits to a statutory reserve until reaching 50% of paid-up capital, with dividend distributions requiring Central Bank approval.

Article 12.1-12.4

A Finance Company must maintain liquid assets of at least 10% of Aggregate Liabilities, with limitations on single bank holdings.

Article 13.1-13.4

A credit exposure of 7% or more of Aggregate Capital Funds to one borrower or related group is a large exposure; total large exposures must not exceed 100% of capital.

Article 14.1

The finance company must adopt a board-approved corporate governance policy, provided to the Central Bank, covering structure, conflicts of interest, remuneration, segregation of duties, and delegation of authority.

Article 14.2, 14.14, 14.26

Finance company founding shareholders, board members and senior management nominees must meet Fit and Proper requirements, with Central Bank discretion to grant exemptions.

Article 14.4-14.13

Finance company boards must act with duty of care and loyalty, oversee strategy and risk, and have at least five members, with 60% finance experts and one-third independent members.

Article 14.15, 14.16

Finance Companies must obtain Central Bank approval before nominating or appointing board members and before any subsequent changes to board membership.

Article 14.17-14.18

The board must establish separate Audit and Risk Management Committees, each chaired by an Independent Member; a credit committee of three or more members is encouraged.

Article 14.19-14.24

Islamic Finance Companies must constitute a Sharia'a supervision committee of at least three Islamic-doctrine specialists, with disputes referred to the Higher Sharia'a Authority.

Article 14.25

An Islamic Finance Company must immediately notify the Central Bank and the Higher Sharia'a Authority upon becoming aware of material information that may negatively affect a Sharia'a supervision committee member's fitness and probity.

Article 14.27-14.29

Finance company senior management nominees must meet professional requirements including at least 10 years' relevant experience, and the CEO role must be separated from other group roles with defined authorities.

Article 15.1

A Finance Company must establish written organisational policies and procedures, reviewed annually and communicated to staff, covering credit, risk, IT security, internal audit, compliance, remuneration and outsourcing.

Article 15.8-15.14

Finance companies must maintain credit policies covering creditworthiness, non-performing loans, collateral, provisioning and classification, plus a board-approved credit approval matrix and annual exposure reviews.

Article 15.15-15.18

Finance Companies must maintain a board-approved, independent risk management function covering credit, market, liquidity and operational risks, and prepare quarterly risk reports for senior management and board review.

Article 15.19-15.23

Financial institutions must maintain adequate IT security systems and orderly business records for at least five years post-customer relationship termination, with continuity plans in place.

Article 15.24-15.26

Finance Companies must maintain an independent internal audit function, report to the board, and conduct audits annually on key activities.

Article 15.27-15.31

Finance companies must maintain an independent compliance function led by a board-appointed Compliance Officer, a board-approved compliance policy with AML/CFT training, and timely suspicious-transaction reporting to the Financial Intelligence Unit.

Article 15.33-15.48

Finance Companies must safeguard confidential data in outsourcing agreements, obtain board and Central Bank non-objection for material outsourcing, bar outsourcing of core control functions, and immediately report material breaches to the Central Bank.

Article 16.1-16.6

Finance Companies must accurately represent their commercial name and provide clear information to borrowers about loan costs and risks.

Article 17.1

Finance Companies must submit borrower credit information monthly to a Credit Information Agency and request credit information prior to extending credit.

Article 18.1-18.6

A finance company must submit audited financial statements to the Central Bank before 31 March, publish audited accounts before 30 April, provide shareholder holdings lists and supervisory returns, and supply requested information confidentially.

Article 18.7, 18.8

Requires a Finance Company to obtain prior Central Bank written approval for changes such as name, capital, mergers, branches, senior management appointments, outsourced agents, subsidiaries, asset encumbrances, and 5% or greater shareholding changes.

Article 19.1-19.6

A finance company must appoint a Central Bank-approved external auditor, must not lend to its auditors, must rotate the audit firm every six years and the engagement partner every three years.

Article 20.4

Finance Companies must give the Central Bank full access to accounts, records and documents, plus any information and facilities it requires, for an examination.

Article 21.1-21.9

Applicants for a Restricted Licence Finance Company must obtain a Central Bank Licence, disclose funding sources, submit a three-year business plan, and begin Short-Term Credit within 12 months.

Article 21.10-21.16

Restricted Licence Finance Companies planning changes to Short-Term Credit services must apply six months in advance and maintain compliance with licensing requirements.

Article 22.1-22.4

A Restricted Licence Finance Company may only provide short-term credit within prescribed criteria, funded solely by shareholder equity, retained earnings or debt instruments, and is barred from crowdfunding and taking deposits.

Article 23.1-23.7

Finance companies must cap short-term borrower credit at the lower of AED 20,000 or three months' verified income, with no interest and fees capped at 30%.

Article 24.1-24.7

Restricted finance companies must obtain borrower consent before reviewing credit reports, avoid sharing borrower data without consent, and run affordability assessments with credit report checks for AED 5,000+.

Article 25.1-25.6

Restricted Licence Finance Companies must maintain minimum capital funds of the higher of AED 20 million or 5% of lending, with Central Bank approval for capital changes.

Article 26.1-26.7

Restricted Licence Finance Companies must adopt governance policies, a Fit and Proper framework and prior Central Bank approval for appointing Authorized Individuals or changing board membership.

Article 27.1-27.6

Restricted Licence Finance Companies and Agents must maintain approved risk governance frameworks, internal controls, segregation of duties, cyber and fraud controls, and adequate resources for credit underwriting.

Article 28.1-28.5

Restricted Licence Finance Companies and their agents must maintain compliance arrangements, meet AML Law and consumer protection obligations, operate prudently, and ensure outsourcing providers maintain adequate information security and risk management.

Article 29.1-29.10

Restricted Licence Finance Companies and Agents must disclose total fees with calculation examples, explain late-payment consequences, obtain signed credit documentation, and keep transparent, plain-language product terms.

Article 30.1

Restricted Licence Finance Companies and Agents must establish internal complaints, dispute and grievance redress mechanisms to handle borrower complaints fairly and promptly, with mechanism details included in agreements.

Article 31.1-31.3

Restricted Licence Finance Companies must file prescribed Central Bank reports on finances, customer base, arrears, complaints, fraud and outsourcing, and immediately notify ownership or senior management changes.

Article 31.4-31.8

Restricted Licence Finance Companies must maintain detailed records and ensure data protection and security for borrower information.

Article 33.1-33.2

Violations of the Regulation or its Standards may trigger Central Bank supervisory action and sanctions, including restricting management or board powers, interim management, fines, or barring individuals from the UAE financial sector.

Article 15.20-ret

Finance companies must retain business documents, records and files for at least five years from the date the customer relationship terminates.

Article 31.8-ret

Restricted Licence Finance Companies must retain records of promotional history, internal policies, financial ledgers, and communications related to borrowers for compliance.

Article 6.2-ret

Finance companies must retain their licence application file, including feasibility study, constitutional documents, management CVs and bank guarantee, for the life of the licence.

Article 24.5-ret

Finance companies must keep borrower affordability assessment and credit report review records in the credit file; the source states no retention period.