Abu Dhabi: A new federal law in the UAE is expected to put the legal framework for the Central Bank to impose fines on banks that operate in the country in case they break any laws.
A source from the Central Bank, who chose to remain anonymous, told Gulf News that the law is yet to be drafted and approved, but that a motion has been put forward.
“The Central Bank already has the authority to regulate, advise, and fine other banks in case they break the law. This authority will soon be regulated by federal law passed from the Cabinet. The law has not been issued yet, and neither has a draft. This law will simply regulate the Central Bank’s authorities,” the source said.
The source said the federal law is not expected to be issued for another year.
He added that the Central Bank currently has the authority to take other banks to court, and apply the verdict issued in the case.
The source also said that the movement to issue to a federal law is not related to news from Standard Chartered, which closed many of its Small and Medium Enterprises (SMEs) in the UAE last month. The bank is currently under investigation by the US government for allowing Iranians to open accounts in the UAE.
“As announced previously, the Group has decided to exit part of its SME business in the UAE as part of its broader efforts to sharpen its strategic focus, exiting non-strategic business, including those where increased regulatory costs could undermine their economic viability,” the bank said in a statement.
Standard Chartered will, however, said it will retain certain clients who will be serviced under the Commercial Clients category.
“This newly formed segment looks at banking mid-sized enterprises with annual sales turnover in the range of $10 million up to $150 million, with a strategic focus on clients that will trade, expand, and invest across Asia, Africa, and the Middle East,” the statement said.
