New UAE Banking Law revamps financial regulatory framework

The Central Bank of the UAE (CBUAE) has implemented Federal Decree-Law No (6) of 2025 Regarding the Central Bank, Regulation of Financial Institutions, and Activities, and Insurance Business – commonly referred to as the New Banking Law – which consolidates its position as the UAE regulator for banking, finance and insurance activities.

The New Banking Law repealed and replaced two prior laws: Federal Decree-Law No (14) of 2018, which governed the CBUAE and financial institutions’ activities; and Federal Decree-Law No (48) of 2023, which governed insurance activities across the UAE.

The New Banking Law is the CBUAE’s primary regulatory law and reflects the CBUAE's evolving regulatory framework by expanding licensed financial activities to include providing open finance services, providing payment services using virtual assets and conducting licensed financial activities through emerging technologies. These changes were largely expected.

The legislation also introduces modern tools such as early intervention measures, as well as a unified licensing and consumer protection regime for resolving disputes. Sanadak will remain an independent entity, responsible for receiving and settling complaints from customers of banks and insurance companies. In line with the country’s digital-first strategy, licensed financial institutions will also provide all community members with access to education on banking and financial services to improve financial inclusion in the UAE.

Commenting on the New Banking Law, UAE-based financial regulation and fintech expert, Marie Chowdhry, said: “This overhaul reflects the CBUAE's commitment to regulatory clarity, consumer confidence and sustainable financial sector growth. At its core, this change is about future-proofing the UAE’s financial system by ensuring it remains resilient, inclusive and responsive to emerging technologies and international standards. We largely anticipated these changes which we believe have been in the works for some time. We are anticipating updates being made to the retail payment systems (RPS) and stored value facilities (SVF) frameworks in due course to tidy up these regulations sometime in the future.”

The New Banking Law also gives the CBUAE greater powers to intervene early and impose administrative fines for violations including against entities or individuals who engage in licensed financial activities without a licence or authorisation from the CBUAE. As a “resolution authority”, the CBUAE will also be empowered to introduce, remove and appoint the management of financial institutions and, when necessary, recover funds from violating parties. Administrative fines have also been substantially increased. All penalty settlements will be published on the CBUAE’s official website.

The reforms are also expected to promote the stability of the national currency and financial system by giving the CBUAE greater oversight over foreign reserves.

Jessica White, an expert in financial regulation and fintech at Pinsent Masons, said the new law would make it easier for entities already operating in or looking to break into the country’s financial and insurance sectors. “This reform brings clarity and cohesion to the UAE’s financial and insurance regulation, making it easier for businesses to navigate and comply,” she said. “This is a strategic move to support innovation, protect consumers and align with global best practices.”

Chowdhry said businesses operating across the banking, fintech and insurance sectors in the UAE should now take this opportunity to reassess their licensing, governance and compliance frameworks to ensure they remain compliant under the New Banking Law.