Law No. (14) of 2018 Regarding the Central Bank


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•	Decretal Federal Law No. (14) of 2018 Regarding the Central Bank
• Decretal Federal Law No. (14) of 2018 Regarding the Central Bank `

Law No. (14) of 2018 Regarding the Central Bank

 Essential information about the UAE central bank law;

    • Decretal Federal Law No. (14) of 2018 Regarding the Central Bank & Organization of Financial Institutions and Activities:

This law has been amended by The Decretal Federal Law No. (1) of 2020, Decretal Federal law No. (25) of 2020, Decretal Federal law No. (2) of 2021, Decretal Federal Law No. (9) of 2021 and Decretal Federal Law (23) of 2022 respectively.


    • Part I – The Central Bank –

o          Chapter One: Organization & Objectives of the Central Bank

          Article (2) Independence of the Central Bank

1)The Central Bank shall be considered a Federal public institution having its own body corporate, and enjoying financial and managerial independence, and the required juridical capacity to conduct all businesses and activities, which ensure attainment of its objectives.

2)The Central Bank shall not be subject to the provisions of laws relating to public finance, tenders and auctions, public accounts and civil service, and its own regulations in these respects, shall apply.

3)The functions of State Audit Institution as per Federal Law No. (8) of 2011, Regarding Re-organization of the State Audit Institution, shall be confined to post-audit, and it shall have no right to interfere in the running of the Central Bank business, or challenge its policies.

          Article (3) The Central Bank Headquarters

Headquarters of the Central Bank and its official address, along with its main branch shall be located in the State’s capital and may, upon Board of Directors approval, establish subsidiaries and open branches, offices and agencies inside and outside the State, and appoint agents and correspondents inside and outside the State.

          Article (4) Principal Objectives and Functions of the Central Bank

The Central Bank aims at achieving the following objectives:

    1. 1) Maintain stability of the national Currency within the framework of the monetary system.

    2. 2) Contribute to the promotion and protection of the stability of the financial system in the State.

    3. 3) Ensure prudent management of the Central Bank’s Foreign Reserves.

    4. 4) Provide appropriate environment to develop and enhance the role of the insurance industry in insuring people, property and responsibilities against risks to protect the national economy, encourage fair and effective competition, provide the best insurance services at competitive prices and coverage, and localize jobs in the insurance market.

For the purpose of achieving its objectives, the Central Bank shall undertake the following functions and jurisdictions:

    1. a. Draw up and implement monetary policy while considering the State’s general strategy.

    2. b. Exercise the privilege of Currency issuance.

    3. c. Organize Licensed Financial Activities, establish the foundations for carrying them on, and determine the standards required for developing and promoting prudential practices in accordance with the provisions of this decretal law and international standards.

    4. d. Set up appropriate regulations and standards for protection of customers of Licensed Financial institutions.

    5. e. Monitor the credit condition in the State, in order to contribute to the achievement of balanced growth in the national economy.

    6. f. Manage foreign reserves to maintain, at all times, sufficient foreign currency assets to cover the Monetary Base as per the provisions of this decretal law.

    7. g. Regulate, develop, oversee and maintain soundness of the Financial Infrastructure Systems in the State, including electronic payment systems, digital currency, and Stored Value Facilities.

    8. h. Regulate, develop and oversee the insurance sector and business, and propose and implement regulating legislation in this regard

    9. i. Receive requests for establishing and opening branches and representative offices for insurance and reinsurance companies, insurance agents and the professions associated therewith, and issuing the necessary licenses for them in accordance with the regulating legislation in this regard.

    10. j. Protect the rights of the insured and the beneficiaries of the insurance business and monitor the financial solvency of insurance companies to provide adequate insurance coverage to protect these rights.

    11. k. Work to raise the performance and efficiency of insurance companies and oblige them to the rules and ethics of the profession to increase their ability to provide better services to the beneficiaries of insurance, and to achieve positive competition among them.


This article has been amended by Decretal Federal Law No. (25) of 2020. You are viewing the latest version. To view the previous version, click the version box below.

Version 1(effective from 31/10/2018 to 02/01/2021)

o          Chapter Two: Capital, Reserves & Accounts of the Central Bank

          Article (5) Capital and Reserves

1) The capital of the Central Bank shall be Twenty Billion (20,000,000,000) Dirhams.

2) A sum of Seventeen Billion Five Hundred Million (17,500,000,000) Dirhams shall be transferred from the General Reserve Account, to increase the capital to the amount referred to in item (1) of this article.

3) The capital may be increased by a federal decree based on a proposal of the Board of Directors, presented by the Minister, and approved by the Cabinet. Such increase shall be paid either by transfer from the General Reserve Account or directly by the Government.

4) The capital of the Central Bank may only be reduced by a law.

5) The Central Bank shall establish a General Reserve Account that should not exceed four (4) times the paid up capital referred to in item (1) of this article. All net profit shall, after that, automatically devolve to the Government.

6) The Board of Directors shall, at the end of each financial year, determine the Central Bank’s annual net profits after deducting administrative and operational expenses, and allocating necessary funds for depreciation of assets and reserves, provisions for bad and doubtful debts and end of service indemnity for the staff of the Central Bank, along with the contingencies and/or other purposes the Board of Directors may determine, and in general, all other financial expenses normally deducted from net profits by banks, and the resulting net profits for each financial year shall be posted to the General Reserve Account.

7) The Cabinet shall issue a resolution specifying the percentage of profits to be retained by the Central Bank until the total balance of the General Reserve Account reaches the four (4) times limit referred to in item (5) hereof.

8) Should the balance of the General Reserve Account, as at end of any financial year, be insufficient to cover the losses of the Central Bank; the deficit shall be met by the Government.




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