UAE Central Bank Imposes Over Dh370 Million In Fines On Banks, Exchange Firms, And Insurers

Gulf Insider

18 hours ago

The Central Bank of the UAE has imposed more than Dh370.3 million ($101 million) in fines since the start of 2025 against banks, money exchange houses, insurers, and a finance company, in one of its most extensive enforcement campaigns in years, according to a review of official statements issued by the regulator.
The penalties, also included license cancellations, suspensions, and restrictions on operations, were the result of the central bank's intensifying scrutiny of the country's financial sector, as it seeks to reinforce its credibility as a global financial hub and shed lingering reputational risks related to money laundering and terrorism financing.
Since January, the regulator has announced penalties against at least 13 money exchange firms, seven insurance and brokerage companies, 10 banks, including three foreign lenders, and one finance company.
In some cases, senior executives were personally fined, including one branch manager who was ordered to pay Dh500,000 and barred from holding specialized financial roles in the country.
The most severe sanctions came in May, when the central bank imposed a Dh200 million fine on a money exchange company, alongside a Dh500,000 penalty against its branch manager.
Earlier in the year, one firm was hit with a Dh100 million fine, while foreign banks were penalized with multimillion-dirham sanctions for compliance failures.
In addition to monetary fines, the regulator revoked the licenses of several exchange houses, including Gomti Exchange and Al Hindi Exchange, and shut down branches of foreign insurers.
It also forced one local bank to halt onboarding new Islamic banking clients for six months after inspectors identified significant compliance lapses.
The penalties resulted from inspections that revealed violations in three areas: non-compliance with federal laws governing licensed financial institutions, weak anti-money laundering (AML) and counter-terrorism financing (CFT) systems, and breaches of consumer protection and market conduct standards.
'The Central Bank will not tolerate violations that undermine transparency, consumer protection, or the integrity of the financial system,' the regulator said, emphasizing its role in safeguarding stability in the UAE's banking and exchange sectors.
'While the central bank has long imposed penalties, the decision to publish details more consistently signals a commitment to transparency and to bolstering the efficiency of the financial system,' said Ahmed Youssef, a veteran banking analyst in Dubai.
He added that the measures reinforce the UAE's position as a trusted regional and international financial hub, especially in the wake of the European Union's recent decision to remove the country from its list of high-risk jurisdictions for money laundering and terrorism financing.
Another analyst, Amjad Nasr, noted that the crackdown reflects 'a proactive supervisory model' designed not just to punish, but to enforce corrections and upgrades within financial institutions.
'Despite clear regulatory roadmaps, some firms remain slow to modernize or fail to strengthen their compliance frameworks,' he said. 'In such cases, fines are not an end in themselves but a corrective tool to force accountability.'
The UAE has long sought to balance its rapid economic growth with the need to meet international compliance standards. Failure to do so, experts warn, could risk blacklisting by global bodies, a move that would constrain cross-border banking operations and discourage foreign investment.
The central bank's clampdown comes just months after the European Parliament's approval of removing the UAE from its 'high-risk' AML list, a development officials hailed as recognition of the country's improved regulatory regime.