For the past six months, the central bank of the UAE has halted the Islamic windows of local banks from accepting new customers and has imposed fines totaling over DH33.5 million (around $953,632) for breaching Sharia Governance Rules.
On Wednesday, the bank announced that these penalties came after a review by its Sharia supervisory body, which identified violations by one of the banks, although its name wasn’t disclosed.
The central bank emphasized its commitment to ensuring that financial institutions and their personnel comply with UAE laws and regulations, maintain transparency, and uphold the integrity of the banking system to protect the country’s financial framework.
In recent weeks, there has been an increased focus on regulatory compliance within the banking sector.
Just this Tuesday, a Dh2 million fine was enforced on Exchange House for not adhering to the national policies and procedures related to Money Laundering and Counterterrorism Financing (AML/CFT).
In fact, last month, Exchange House was fined Dh100 million due to major failings in its AML/CFT compliance framework. Previously, in May, it received a Dh200 million penalty for similar reasons, and branch managers faced fines as well, resulting in bans from working at authorized financial institutions in the UAE.
Earlier this month, in a notable development, the European Commission removed the UAE from its list of high-risk countries for money laundering, acknowledging the nation’s efforts to enhance its regulatory practices.
This updated classification will take effect unless the European Parliament and Council raise any objections within a month, with a possible extension for another month.
Moreover, the Financial Action Task Force (FATF) had removed the UAE from its “gray list” in February due to significant advancements in regulatory reforms, as the country was previously on that list in 2022.
