The UAE Central Bank recently launched a process of extensive consultation with relevant stakeholders in the UAE aimed at developing a new regulatory framework to protect the financial consumer. This new framework would ensure the protection of financial consumers in the country through a set of requirements that all financial institutions that are subject to the supervision of the central bank will have to fulfill.
After the implementation of Federal Decree Law No. (14) of 2018 regarding the Central Bank and the regulation of financial institutions and activities, the Central Bank of the United Arab Emirates has begun to expand its functions and responsibilities under Article (121) of the aforementioned law that provides for the establishment of all regulations and laws that will provide protection for institutional customers Finance.
This new framework is expected to contribute to enhancing the quality of disclosure and transparency standards, and ensuring the timely response to customer complaints, and obliges financial institutions to provide an effective mechanism for dispute resolution, according to a statement issued by the Central today.
The Central Bank has also established the basics of the newly created Consumer Protection Department, which has undertaken a comprehensive and extensive review of customer experiences with financial institutions in the UAE and has made benchmark comparisons with institutions that adopt international best practices.
Central Bank Governor Mubarak Rashid Al-Mansoori said: “Through this process, the Central Bank of the United Arab Emirates is moving forward to lay the foundations for a new regulatory framework for financial consumer protection, based on a set of principles related to consumer protection in general.
Principles to be considered within this framework include those related to disclosure and transparency, regulatory oversight, corporate governance, market and business behaviors, and consumer data, information and privacy protection. Moreover, principles of responsible financial practices, complaints management, conflict resolution, consumer education, awareness, financial inclusion, and adherence to Islamic financial services to Islamic principles, will also be adopted to ensure a comprehensive and effective framework is in place.
The final outcome of the aforementioned consultation process will be reviewed, approved and included in the proposed framework before it is submitted to the Board for final approval.