Banking and Finance Law

When it comes to the banking system, UAE and Kuwait are among the most advanced, reliable and has highly developed banking infrastructure. This level of development has become attainable because of the strict government regulations and measures implemented by their Central Banks.

The Central banks oversees and monitors all activities of banks in the UAE and Kuwait. The process of obtaining a license for opening a financial institution in the UAE and Kuwait is very difficult and that is the primary reason why the UAE and Kuwait banking sectors has become one of the most reputable banking institutions. Central banks serves the function of the main regulatory authority in the UAE and Kuwait. It is responsible for handling most important regulatory tasks such as currency management, details the monetary policy line and exercise and implements banking regulations.

The banking systems of UAE and Kuwait is governed under the applicable Banking Laws, which includes The Central Bank Law; Law of Islamic Banks; Circulars relating to Anti-Money Laundering (AMLSCU). Recently, UAE issued Federal Law No. 14 of 2018 which provides the structure of the UAE Central Bank and the organization of UAE institutions and their activities. Under the new law, Central Bank is in charged with the following:

• Administer exclusive control over UAE currency
• Maintain and oversee UAE currency stability
• Develop and direct credit policy to enhance UAEeconomy
• Supervise the banking system to ensure its effective implementation
• Advisory function to the UAEgovernment concerning financial and monetary issues
• Maintain the government reserves of foreign currency and gold

UAE and Kuwait Central Banks aims to ensure transparency of bank activities, for this purpose they issued regulations that define the guidelines for providing banking services. At the same time, certain requirements are imposed and a standard list of supporting documents are required in opening a bank account in the UAE and Kuwait. Among these banking regulations includes:

• Prohibition on the issuance of credit cards and grant of loans over the phone by any banking institutions and financial companies;
• Maximum amount of personal loan that can be granted to a borrower is equal to 20 monthly salaries;
• No person or legal entity will be allowed to open a bank account unless confirmation of UAE and Kuwait residence has been met;
• Supporting documents that are mandatory in opening bank accounts includes: Passport with UAE or Kuwait residence visa for UAE and Kuwait citizenship, salary certificate or confirmation of source of income, NOC from the employer or similar document.

In addition, it is important to understand that each banking institution may apply its own compliance regulatory requirements to implement additional account-opening procedures and documentary requirements.

Hence, the new Banking Laws of UAE and Kuwait bolsters the Central bank’s ability to implement effective and strict regulatory control in the banking sector which are in line with the international banking practices and standards. The banking systems of the UAE and Kuwait has been known to be one of the most secured and competent authorities which guarantees the safety of every banking transaction across the United Arab Emirates.

The UAE and Kuwait with their evolving financial Markets, requires sophisticated Legal Advisors who understand the meaning of risk and reward. Our law firms in Dubai UAE and Kuwait has experienced Lawyers in the field of Local and international banking and finance Law, Banking Regulation and Customs and have executed complex transactions for corporate bodies, Banks, Funds and financial institutions.

The team has a wealth of experience amassed on a wide variety of projects, rescheduling debts and preparing Loan documentation in addition to providing legal advice on banking issues including Letters of credit, commercial mortgages and loans.