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Article (1) Introduction

C 3/2023 Effective from 29/9/2023
1.1The Central Bank is seeking to enhance the organization, development and regulation of Finance Companies and Restricted Licence Finance Companies in the United Arab Emirates (U.A.E.) in the context of the overall organization of the financial sector.
1.2In introducing this Regulation the Central Bank wishes to ensure that Finance Companies and Restricted Licence Finance Companies in the U.A.E. are:
a.Operating within transparent and well-defined organizational structures and operations;
b.Prudently managed within a framework of permissible activities; and
c.Equipped with the necessary financial resources and internal risk management systems.
1.3This Regulation also establishes a framework for the regulation and supervision of Restricted Licence Finance Companies and sets requirements for Finance Companies to contract with Agents, both of which are permitted to offer only Short-Term Credit faciltiies. Restricted Licence Finance Companies are not permitted to contract with Agents to offer Short-Term Credit. Agents, therefore, must partner with either a Finance Company or a Bank before offering Short- Term Credit. The following are outside of the scope of this Regulation:
a.Short-Term Credit activities conducted directly between Juridical Persons and not conducted by way of business;
b.Any credit activity, whereby the payment to the vendor directly by the purchaser of a good or service is completed on an instalment basis and not conducted by way of business; and
c.Factoring and/or Finance Lease activities.