3.1 Specialized Banks may only provide the services listed in Article 3.3 to UAE Residents.
3.2 Specialized Banks may only conduct the activities mentioned in Article 3.3 in UAE Dirham.
3.3 Specialized Banks are only permitted to perform the following Licensed Financial Activities:
3.3.1 Retail finance, including personal loans and vehicle loans;
3.3.2 Mortgage finance, including residential and commercial mortgages;
3.3.3 Wholesale finance, including loans to large corporates, small and medium-sized enterprises, microfinancing, finance and operating leasing and wage protection schemes;
3.3.4 Issue debit, credit and pre-paid cards, provided they are operated under schemes licensed in the UAE;
3.3.5 Providing stored value services, electronic retail payment and digital money services; and
3.3.6 Distribution of third party products as an agent; provided that the Specialized Bank received approval from the relevant competent authority for the distribution of the third party products concerned.
3.4 Wholesale lending must not exceed 50% of the Specialized Bank’s total lending.
3.5 Immovable property taken as collateral when lending must be located in the UAE.
3.6 Specialized Banks may only accept deposits subject to the following conditions:
3.6.1 The aggregate amount of a natural person’s accounts with the Specialized Bank is limited to 5,000,000 UAE Dirham. The Central Bank reserves the right to amend this limit as appropriate;
3.6.2 The aggregate amount of a juridical person’s accounts with the Specialized Bank does not exceed 10% of the total amount of all accepted deposits and certificates of deposit of the Specialized Bank;
3.6.3 The deposit accounts are in UAE Dirham only;
3.6.4 The deposit accounts can only be opened for UAE Residents; and
3.6.5 The deposits may only be used for lending purposes or reinvested in deposits with other UAE licensed banks.
3.7 Wholesale funding must not exceed 40% of the Specialized Bank’s total funding.
3.8 Specialized Banks are allowed to issue debt securities in UAE Dirham only and must obtain prior approval from the Central Bank. Foreign funding must not exceed 25% of the sum of Aggregate Funding of a Specialized Bank.
3.9 Specialized Banks are allowed to borrow from UAE Banks.
3.10 The aggregate of all participations in the share capital of other companies must not exceed 25% of the Aggregate Capital Funds of the Specialized Bank.
3.11 Any single participation in the share capital of other companies must not exceed 10% of the Aggregate Capital Funds of the Specialized Bank.
3.12 Any single participation in the share capital of any finance sector company must not exceed 25% of the share capital of the investee. This restriction does not apply to companies supporting operational activities of the investing Specialized Bank.
3.13 A Specialized Bank may place deposits in and obtain certificates of deposit from UAE Banks only, provided that:
3.13.1 The total of deposits and certificates of deposit placed at any one Bank does not exceed 30% of the Specialized Bank’s total deposits placed; and
3.13.2 Any such deposit or certificate of deposit placed in any UAE Bank does not exceed 10% of the Aggregate Capital Funds of the Specialized Banks.
3.14 A Specialized Bank must not purchase or acquire any immovable property, except for immovable property that is used as premises for its operations.
3.15 Article 3.14 of this Regulation shall not prevent a Specialized Bank from securing a debt on any immovable property and in the event of default in payment of the debt, from entering into a settlement agreement with the relevant borrower and as a result holding that immovable property for realization by sale or auction within three years from the date such ownership was established. The said period could be extended by the Central Bank based on justification acceptable to the Central Bank.
3.16 Islamic Specialized Banks may, as an exemption to article 3.14, own property including immovable property and goods only as part of an underlying financing contract with a borrower.
3.17 Specialized Banks must operate a low credit risk model.
3.18 The total consolidated assets of a Specialized Bank cannot exceed twenty-five (25) billion Dirham.
3.19 The total off-balance sheet exposures of a Specialized Bank cannot exceed more than 15 percent of total consolidated assets.
3.20 Specialized Banks are subject to Central Bank Reserve Requirements.