The Central Bank shall be managed by a Board of Directors of seven (7) members, including the Chairman and the Governor.

1) Members of the Board of Directors shall be appointed by a Federal Decree based on recommendation of the Cabinet, and shall serve for a four (4) year term renewable to similar periods. The Decree designates from among the members of the board of directors one or more deputy chairman.
2) The Chairman, his Deputies and the Governor, shall each have the rank of Minister.
3) The Chairman issues a decision defining the powers of his Deputies.
4) Subject to item three (3) of this article, Should the Chairman be absent or his post became vacant, the Deputy Chairman shall replace him; and should both the Chairman and his Deputies be absent or their posts became vacant, the Governor shall replace them both.

A member of the Board of Directors shall satisfy the following conditions:

1. 1) Be of UAE nationality.
2. 2) Have experience in economic, financial or banking affairs.
3. 3) Not have been declared bankrupt or failed to repay his debts.
4. 4) Not have been convicted, of a felony or a misdemeanor involving moral turpitude or dishonesty, unless rehabilitated.
5. 5) Not an active minister, excluding the Chairman of the Board of Directors.
6. 6) Not a member of the Federal National Council.
7. 7) Not holding any position, a job or board of directors’ membership of any institution licensed by any of the Regulatory Authorities in the State or by any of the regulatory authorities in the Financial Free Zones.
8. 8) Not a controller or auditor of accounts of a Licensed Financial Institution, nor owner, agent, or partner in any accounts audit firm.
9.  

Should a member of the Board of Directors resign, or his seat become vacant for any reason whatsoever prior to the expiry of his term of office, a successor shall be appointed, in accordance with the membership conditions referred to in Article (12) of this decretal law, for the remaining term of office of the Board of Directors

1)Membership of the Board of Directors terminates upon end of the term of office without renewal, death, or resignation. Membership of the Board of Directors may also be terminated by a federal decree, based on the Cabinet approval, in any of the following cases:

• a. If the member committed grave mistakes in management of the Central Bank, or committed serious breach of his duties.
• b. If the member absented himself from three (3) consecutive meetings of the Board of Directors without the Board of Directors’ approval, unless such absence was due to his being on an official assignment, annual or sick leave, or due to any other acceptable reason.
• c. If the member no longer satisfies any of the membership conditions referred to in Article (12) of this decretal law.
• d. If the member was rendered incapable of performing his functions, for any reason whatsoever.

2)Where term of office of members of the Board of Directors has expired without renewal, members of the Board of Directors shall continue to perform their functions until such time new members were appointed

The Board of Directors shall, within the limitations imposed by the provisions of this decretal law, exercise all powers required for achieving the objectives for which the Central Bank has been established.

The Board of Directors shall, in particular, exercise the following:

1. Approve regulations, rules, standards, instructions and business controls to perform its functions and jurisdictions, and take all measures and actions necessary to enforce the provisions of this decretal law.
2. Establish and oversee implementation of polices for deployment and management of the Central Bank’s Own Funds and assets.
3. Decide on matters relating to issuance of the Currency and its withdrawal from circulation.
4. Issue regulations relating to organization of Licensed Financial Activities and decide on related matters, including regulations and procedures relating to supervision and oversight thereof, and determine conditions and rules for granting licenses to Licensed Financial Institutions to carry on Licensed Financial Activities and authorizations to undertake Designated Functions.
5. Approve regulations, rules, standards, instructions and business controls for insurance and reinsurance companies, insurance agents and the professions associated therewith.
6. Establish policies, and approve regulations relating to prudential supervision, and the standards and guidelines relating to Licensed Financial Activities.
7. Establish regulations and standards for protection of customers of Licensed Financial Institutions.
8. Approve regulations, controls, and procedures for encountering money laundering and combating terrorism financing and unlawful organizations.
9. Take necessary actions, procedures and impose administrative penalties against any Person violating the provisions of this decretal law, and regulations issued in implementation thereof.
10. Approve rules and regulations for maintaining integrity and efficiency of Financial Infrastructure Systems licensed, established, developed, or operated by the Central Bank.
11. Approve risk management and compliance policies at the Central Bank.
12. Approve Central Bank’s bylaws, issue the organizational structure and the administrative, financial and technical regulations, and determine powers and competencies, within the limitations of the provisions of this decretal law.
13. Approve human resources policies at the Central Bank.
14. Approve rules for the Central Bank institutional governance, including a set of rules and regulations aimed at achieving performance quality and excellence, in line with the Government’s strategic plans and objectives.
15. Decide on loans and advances granted to the Government, in accordance with the provisions of this decretal law.
16. Approve settlements and reconciliations relating to Central Bank’s businesses.
17.  Approve the Central Bank’s annual budget and any variations thereof during the year.
18.  Approve the Central Bank’s annual final accounts and the amount of net annual profits.
19. Regulate the mechanism of objections related to the insurance activity.
20. Deal with all other matters deemed within its powers, and are conducive to achievement of the objectives of the Central Bank and the discharge of its functions, in accordance with the provisions of this decretal law

1) The Board of Directors may form the committees it deems appropriate to assist in the discharge of its functions and jurisdictions in accordance with the provisions of this decretal law. Such committees may be formed from within the Board of Directors, or from outside the Board of Directors. The Board of Directors may also form committees and advisory boards, which include in their membership Persons from outside the Central Bank, and shall determine the remunerations of members of such committees and boards.

2) The Board of Directors may delegate some of its powers to the Chairman, to the Governor, or to any committee from within the Board of Directors.

3) The Board of Directors may, annually, review the terms of reference and performance of the committees formed in accordance with item (1) of this article, and may take necessary actions to ensure compliance with professional and international standards, codes of conduct and governance.

1) Pursuant to this decretal law, an authority named “Higher Shari`ah Authority” attached to the Central Bank shall be established with a membership not less than five (5) members and not exceeding seven (7) members, of sufficient knowledge and experience in the jurisprudence of Islamic financial transactions.

2) The Board of Directors shall approve the authority’s work system, its functions and competencies, and the mechanism for financing the costs of its establishment and continuity of work.

3) The Governor shall issue a decision to form the authority and appoint its members.

4) Licensed Financial Institutions, which carry on the whole or part of their businesses and activities in compliance with Islamic Shari`ah shall bear all expenses of the Authority referred to in item (1) of this article, including remunerations, allowances and expenses of its members according to the decision issued by the Board of Directors.

5) The Higher Shari`ah Authority shall determine the rules, standards, and general principles applicable to Shari`ah-compliant businesses and Licensed Financial Activities, and shall undertake supervision and oversight of the internal Shari`ah supervisory committees of Licensed Financial Institutions, referred to in Article (79) of this decretal law.

6) The Higher Shari`ah Authority shall approve Islamic monetary and financial tools issued and developed by the Central Bank to manage monetary policy operations in the State, and provide its opinion regarding the specific regulatory rules and instructions relating to the operations and activities of Licensed Financial Institutions which conduct the whole or part of their business and activities in accordance with the provisions of Islamic Shari`ah.

7) The Fatwas and opinions of the Higher Shari`ah Authority shall be binding on the internal Shari`ah supervisory committees, referred to in Article (79) of this decretal law, as well as on Licensed Financial Institutions which conduct the whole or part of their business and activities in accordance with the provisions of Islamic Shari`ah.

8) The Higher Shari`ah Authority may seek assistance of a specialized party, if necessary, to conduct Shari`ah external audit of the business of any Licensed Financial Institution, which carry on the whole or part of their businesses and activities in accordance with the provisions of Islamic Shari`ah, and the conditions and procedures determined by the Authority, at the expense of the concerned institution.

The Board of Directors may, upon recommendation of the Governor, appoint senior Central Bank executives, with titles of deputy, assistant governors, or any other titles the Board of Directors deems appropriate. The decision appointing the deputies and assistants shall determine their competences, salaries, and remunerations

1) The Governor, his deputies and assistants shall devote their full time to their work at the Central Bank, and none of them may hold any paid or unpaid position, or be a member of the Board of Directors of any of the Regulatory Authorities in the State, or in the Financial Free Zones or the Board of Directors of any Licensed Financial Institution, or enter, directly or indirectly, in any contracts concluded by the Public Sector.

2) The prohibition referred to in item (1) of this article shall not apply to assignments entrusted to any of them by the Government in the Public Sector, including representation in international conferences, or representation of the Public Sector in the various committees, subject to the approval of the Board of Directors.

The Board of Directors shall set up a regulation regarding remunerations of the Governor and his other entitlements, and the remunerations of the Chairman and members of the Board of Directors. A federal decree, in this respect, shall be issued.

1) The Board of Directors shall, upon invitation by the Chairman, hold an ordinary meeting, at least once every sixty (60) days.

2) The Chairman of the Board of Directors may call the Board of Directors to convene whenever the need arises.

3) The Chairman of the Board of Directors shall convene the Board of Directors upon request of, at least, three (3) members of the Board of Directors

1) Five (5) members of the Board of Directors including the Chairman of the Board of Directors, one of his Deputies, or the Governor, shall constitute quorum for any meeting.
2) Decisions of the Board of Directors shall be adopted by a majority vote of the members present. In case of a tie, the Chairman of the session shall have the casting vote.

Without prejudice to the powers and competencies of the Chairman of the Board of Directors, the Governor shall be the legal representative of the Central Bank, and shall sign, on its behalf, all instruments, contracts and documents.

Without prejudice to any competencies established for the Board of Directors or the Chairman of the Board of Directors, the Governor shall conduct and manage all the affairs of the Central Bank, and issue regulations, systems and policies approved by the Board of Directors. The Governor shall be responsible for the implementation of this decretal law, the regulations of the Central Bank and decisions of the Board of Directors. He may delegate some of his powers and competencies to any of his deputies, assistants, or some senior staff of the Central Bank.

1) The Central Bank, members of the Board of Directors, members of committees formed by the Board of Directors, whether from within its membership or from outside, staff of the Central Bank and its duly authorized representatives, shall all be exempt from civil liability towards third parties, in respect of the following:

unless bad faith, with intent to harm third parties, was established.

• a. Exercise, or failure to exercise, the functions, powers, authorities and businesses of the Central Bank, or their own functions, competencies and powers, authorities, and all related practices;
• b. Instructions, guidelines, declarations, data, statements and opinions given by them in relation to the practice of the Central Bank’s functions, powers, authorities and businesses, or their own functions, competencies, authorities and businesses –

2) The Central Bank shall bear all charges, costs, expenses, and attorney fees relating to defense of the Persons referred to in item (1) of this article, in lawsuits pertaining to discharge of their functions at the Central Bank

1) Any member of the Board of Directors, any member of the committees formed by the Board of Directors, any employees or representatives of the Central Bank; any experts, technical personnel, or academics the Central Bank deals with, shall not disclose any information that is confidential, unless such disclosure is consistent with the provisions of item (3) of this article. This prohibition shall remain effective even after the expiry of membership or termination of the service or the function.

2) Confidential information shall include all information received by any of the Persons referred to in item (1) of this article, by virtue of their positions, or in the course of discharging their functions, as long as such information were not made available to the public through official or legal means.

3) Without prejudice to the provisions of Article (28) of this decretal law, confidential information may be disclosed where such disclosure is permitted, legally enforced, or addressed to authorities and agencies within the State or in other jurisdictions

1) A member of the Board of Directors shall, upon his appointment, declare his interests, which may conflict with his membership at the Board of Directors, and whenever a conflict of interest arises. Should any member of the Board of Directors have a personal interest in any contract or dealing to which the Central Bank is party, such member must declare those interest prior to the discussion of the subject; withdraw from the meeting when such dealing or contract is discussed, and should not participate in voting pertaining thereto, in accordance with the code of conduct and governance rules issued by the Board of Directors.

2) Every employee or representative of the Central Bank shall disclose to his manager, or his immediate superior, any interest which may be in conflict with the discharge of his functions, and he may not participate in exchange of opinions, and decisions or measures, taken in this regard.

3) The Board of Directors shall establish codes of conduct for employees and representatives of the Central Bank, as well as disclosure procedures, compliance, and governance

1) The Central Bank may, within the scope of its jurisdiction and in accordance with the Law, cooperate with the concerned regulatory authorities in other countries, and with international institutions, in providing assistance and exchanging information, subject to the following:

• a. The request is made on basis of reciprocity.
• b. The request does not contravene any of the State’s established laws and regulations.
• c. The request is serious and important.
• d. The request is not in conflict with the public interest and public order requirements.

2) The Central Bank shall, in coordination and collaboration with the concerned regulatory authorities, within applicable laws, exercise its powers on Licensed Financial Institutions operating outside the State or in Financial Free Zones.

The Central Bank may seek assistance of experts, technical personnel and academics, determine their remunerations and entitlements. The Board of Directors may also invite to its meetings whomever it may wish to hear their opinion on a specific issue, and such invitee to the meeting shall have no counted vote in deliberations

1) The Central Bank may publish the draft regulations and rules it intends to issue in relation to organization of businesses of Licensed Financial Institutions and Licensed Financial Activities, for their feedback, via a public notice to the concerned parties.

2) The Central Bank may invite concerned parties to provide their feedback on the draft rules and regulations referred to in item (1) of this article, within the period prescribed by the Central Bank.

3) The Central Bank may decide not to publish the draft regulations referred to in item (1) of this article, if it deems such publication contrary to public interest, or to the achievement of the Central Bank’s objectives and discharge of its functions

1) Monetary policy shall be aimed at maintaining soundness and stability of the monetary system in the State, in order to ensure stability and required confidence in the national economy.

2) The Central Bank shall determine monetary tools and operational means for achievement of monetary policy objectives, including policies relating to management of the exchange rate of the national Currency and money markets in the State.

3) The Central Bank shall, on basis of a proposal by the Board of Directors and approval of the Cabinet, determine the national Currency’s exchange rate regime.

4) The Central Bank may, for operational purposes, take necessary measures to manage and control the official exchange rate of the national Currency, as per the guidelines set by the Board of Director

1) The Central Bank may, in line with monetary policy objectives and the current and forecasted status of liquidity, determine and keep with it, minimum Reserve Requirements for each type of deposits, or on total of deposits held with deposit-taking Licensed Financial Institutions. The Board of Directors shall determine the manner in which ratio of the Reserve Requirements is calculated, as it deems appropriate.

2) The Central Bank shall specify all operational arrangements related to the maintenance of the Reserve Requirements referred to in item (1) of this article

The Central Bank may set regulations which determine limits of credit facilities extended by Licensed Financial Institutions to their customers, compared to the total of their stable resources or to the total of deposits of their customers. Such limits may be prescribed for a specific Licensed Financial Institution or for all Licensed Financial Institutions

The Central Bank and the Ministry shall establish a mechanism for coordinating monetary policy and fiscal policy for the purpose of achieving balanced growth in the national economy. Such coordination shall take place before the beginning of each financial year, and whenever necessary, and shall be in respect of volume of government expenditure, the Government’s debt, and debts of governments of emirates members of the Union, along with debts of Government Related Entities, companies and institutions which they own, hold shares in, or manage, and their plans regarding domestic and foreign public debt.

The Central Bank shall solely have the authority to designate any Licensed Financial Institution as systemically important. For such purpose, the Central Bank may require the designated Licensed Financial Institution to take required measures and procedures

1) The Public Sector and other agencies as the Board of Directors deems necessary, shall provide the Central Bank with all the information and statistics it requires for the purpose of performing its functions under the provisions of this decretal law. Such information and statistics shall include all monetary and economic statistics, as well as balance of payments statistics and consumer prices. The Central Bank may publish the statistics it deems appropriate, in whole or in part.

2) The Central Bank shall obtain the approval of other Regulatory Authorities in the State regarding provision and/or publication of non-public information and statistics in relation to institutions under the supervision of those authorities

1) The Central Bank may conduct research and analyses in areas of macro-economy, conduct of monetary policy, and banking and financial operations, as deemed of strategic importance to the State economy.

2) The Central Bank shall publish and issue regular statistical reports, quarterly and annual reviews of the Central Bank, policy briefs and working papers that contain analyses of the relevant data to inform policy decisions, as deemed appropriate.

The Central Bank shall advise the Government on matters falling within its jurisdiction, and shall provide its opinion on monetary, banking, and financial affairs as requested by the Government.

1) The Central Bank shall participate in negotiations relating to the Government’s international monetary and financial agreements, and it may be assigned implementation of provisions of such agreements.

2) The Central Bank may, directly or through Primary Dealers, sell and manage securities issued or secured by the Government or governments of emirates members of the Union, in accordance with an agreement with the concerned government.

1) For the purposes of achieving objectives of its monetary policy, and in order to provide for the Government and governments of emirates members of the Union with their needs for national Currency and/or foreign currencies, the Central Bank shall buy or sell foreign currencies to the concerned government, at prevailing exchange rates.

2) The Central Bank shall conduct banking operations and services for the Government, whether in the State or in other jurisdictions, against fees. The Central Bank may also perform banking operations and services for governments of member emirates of the Union, against fees.

3) The Government and governments of emirates members of the Union, shall open accounts in national Currency and foreign currencies with the Central Bank, and conduct transfers through such accounts.

4) Government funds in national Currency or foreign currencies shall be deposited with the Central Bank, and the latter shall pay or charge interest thereon in view of the prevailing market rates. Governments of emirates members of the Union may also deposit funds in national Currency or foreign currencies with the Central Bank, on which the latter shall pay or charge interest thereon in view of the prevailing market rates.

5) Public Sector entities, other than the Government, and governments of emirates members of the Union, may deposit their funds in national Currency or foreign currencies with the Central Bank. The Central Bank shall pay or charge interest thereon as determined by the Central Bank.

6) The Central Bank may grant advances or other credit facilities to the Government, at interest rates set in accordance with the terms and conditions of the agreement signed between the Central Bank and the Ministry in this regard, provided such advances and credit facilities are for the purpose of covering a temporary, unforeseen deficit in Government revenues, compared to its expenses. The Government may not relend or grant such advances to any other party. Granted advances shall at no time exceed ten percent (10%) of the government’s average revenues realized in the budgets of the last three (3) years. The Government shall repay these advances within a period not exceeding one (1) year from date of granting thereof. In case advances were not repaid at the specified date, the outstanding balance should be subject to an interest charge, as specified in the agreement signed between the Central Bank and the Ministry.

7) The Central Bank may subscribe to securities and debt instruments issued by the Government for maturities exceeding one (1) year, only in cases designated by the Board of Directors. The Government shall repay the amounts due, including interest, on maturity dates. In case of late or early payment an interest charge shall be imposed, as specified in the debt agreement.

Apart from the funds deposited with the Central Bank in accordance with the provisions of Article (40) of this decretal law, the Central Bank may not interfere in the investment and deployment of Government funds or funds of governments of emirates, members of Union, unless it has been assigned to do so per the agreement concluded between the concerned government and the Central Bank.

1) The Central Bank may open the following accounts:

• a. National Currency or foreign currencies accounts for Licensed Financial Institutions, and accept deposits from them. The Central Bank shall pay or charge agreed interest on such deposits.
• b. Accounts for monetary authorities, other Central Banks, foreign banks, international financial and monetary institutions, as well as Arab and international monetary funds. The Central Bank may pay or charge interest on such accounts, and act as agent or correspondent for these parties.

2) The Central Bank may open accounts with monetary authorities, Central Banks, foreign banks or international financial and monetary institutions, as well as Arab and international monetary funds

The Central Bank may conduct the following money and capital markets operations:

1) Purchase, re-purchase, sell, and accept and place deposits of gold bullion or coins and precious metals.

2) Accept and place monetary deposits and pay or charge interest thereon, subject to the provisions of Article (62) of this decretal law.

3) Issue bills payable upon demand and other types of payable financial transfers, at its head office, branches, and offices of its agents or correspondents.

4) Conduct all foreign currency operations and external transfer operations with the Government, governments of emirates members of the Union, public entities, local and foreign banks, licensed Exchange Establishments, other monetary authorities and Central Banks, and other Arab and international financial institutions and funds.

5) Issue securities in the name of the Central Bank, and sell and re-purchase, discount and rediscount, redeem such securities for the purposes of managing monetary policy operations.

6) Purchase, re-purchase, sell, discount and rediscount Eligible Securities and other securities related to the management of its Own Funds and/or Foreign Reserves as per established terms and conditions.

7) Purchase, re-purchase, and sell Shari`ah-compliant commodities and securities, in order to develop liquidity management instruments for Islamic Licensed Financial Institutions.

8) Grant collateralized loans, advances, other credit facilities, and Shari`ah-compliant funding facilities to Licensed Financial Institutions, for the purpose of managing monetary policy operations, in accordance with the terms and conditions the Central Bank deems appropriate and determines from time to time.

9) Grant collateralized loans and advances to monetary authorities, Central Banks, foreign banks, and international financial institutions, and obtain loans and advances therefrom, provided there is consistency of such operations with the Central Bank’s functions and jurisdictions. Interest or commission may be paid or charged for this purpose.

10) Obtain, guarantee or secure loans and advances or issue credit, in any currency inside the State or in other jurisdictions, in accordance with the terms and conditions the Central Bank deems appropriate for the purpose of conducting its own business.

11) Conduct all other operations deemed conducive to the achievement of Central Bank’s objectives

1) The Central Bank shall take all measures it deems appropriate to maintain conduct of operations of Licensed Financial Institutions, within the frameworks and limits set by the Board of Directors.

For this purpose, the Central Bank shall:

1. A) Request to hold a meeting of the general assembly of the licensed financial institution to discuss any issue the Central Bank deems important.
2. B) Request to include any item that the Central Bank deems necessary into the agenda of the general assembly meeting of the licensed financial institution.
3. C) Stopping the implementation of any decision issued by the general assembly of the licensed financial institution in the event that it violates the laws or regulations in force.

2) The Central Bank, according to its own discretion, in cases of necessity during which the deposit-taking licensed financial institution is exposed to liquidity pressures or is subject to crisis management procedures, may provide loans to that establishment, in order to contribute to strengthening and protecting the stability of the financial system and protecting the monetary system in the state.

1) The Central Bank shall set-up rules to regulate securities issued by the Central Bank or the Government in coordination with the various stakeholders. Such rules shall include all aspects of these securities issuance, custody, trading in the State.

2) The Central Bank may appoint Primary Dealers for securities issued inside the State by the Central Bank or the Public Sector, in accordance with the terms and conditions set by the Central Bank.

3) For the purpose of listing securities issued by the Public Sector in the State’s financial markets, the Central Bank shall appoint Primary Dealers approved by it an whom comply with the requirement of the concerned regulator.

The Central Bank may, in accordance with the instructions and rules stipulated in the investment policy and guidelines approved by the Board of Directors, invest its Foreign Reserves in all or any of the following instruments:

1) Gold bullions, gold coins and other precious metals.

2) Currency notes and coins, call money, and placements in foreign countries.

3) Securities issued or secured by governments of foreign countries and related entities, or by international monetary and financial institutions.

4) Derivatives and other financial instruments required for the management of Central Bank’s exposure to interest rates, currencies, credit, gold, and other precious metals.

5) Any other financial assets the Central Bank deems appropriate for investment as foreign assets, subject to approval of the Board of Directors

The Central Bank may, in accordance with the investment policy and guidelines set by the Board of Directors, deploy or invest part of its Own Funds in the following:

1) Purchase and sell securities, and subscribe to loans issued or guaranteed by the Public Sector, or buy shares in any entity wherein the Government or governments of emirates members of the Union hold shares, or is granted a concession in the State.

2) Invest in projects, investment funds and financial institutions not licensed by the Central Bank.

3) Acquire real estate, equity and movable properties allocated for conduct of its business and all related matters.

The Central Bank may appoint external parties to manage its Foreign Reserves and Own Funds, in accordance with the investment policy and guidelines set by the Board of Directors.