Central Bank of the UAE
Establishment in the state of the United Arab Emirates a Central Bank is to be known as the Central Bank of the Unites Arab Emirates. The Bank is considered as a public institution having its body corporate and enjoying the required judicial capacity to conduct all operations and dealings which ensure the attachment of the objectives for which it has been established.The operations of the Bank and the organization of its balance sheet and accounts are carried out in accordance with the commercial principles of banking. The bank’s dealings with other parties are considered as commercial.
None of the provisions of the of the Laws governing the public tenders and auctions, public accounts and civil service, other than the Bank’s own regulation’s, apply to the bank.
The preaudit provided for in Law No. (7) Of 1976 establishing the State Audit Institution does not apply to the Bank’s operations. The Audit Institution limits itself to post auditing of the bank’s operations and have no right to interfere in conducting the Bank’s operations or policies.
The Bank directs the monetary, credit and banking policy and supervises over its implementation in accordance with the State’s general policy and in which as to help support the national economy and stability of the currency.
For the attainment of its objective the Bank:
- Exercise the privilege of currency issue in accordance with the provisions of this Law.
- Endeavor to support the currency, maintain its stability internally and externally, and ensure its free convertibility into foreign currencies.
- Direct credit policy in such ways as to help achieve a steady growth of the national economy.
- Organize and promote banking and supervise over the effectiveness of the banking system according to the provisions of this Law.
- Undertake the functions of the bank of the Government within the limits prescribed in this Law.
- Advise the Government on financial and monetary issues.
- Maintain the Government’s reserve of gold and foreign exchange.
- Act as the banks operating in the Country.
- Act as the State’s financial agent at the international Monetary Fund, the International Bank for Reconstruction and Development and other international Arab Funds and Institutions and carry on all dealings of the State with such concerns.
Commercial bank
Commercial bank is considered any institution which, customarily, receives funds from the public in the form of demand, under notice, or time deposits, or which carries on the placement of debt instruments or deposits certificates to be used, in whole or in part, for its accounts and at its risk, for granting loans and advances.Commercial banks also carry on operations relating to the issue and collection of checks, the placing of public or private bonds, trade in foreign exchange and precious metals, or any other operations allowed for commercial banks either by law or by customary banking practice.
The Board of Directors of the Central Bank defines the aspects of activity and operation requirements of commercial banks with restricted banking licenses. Such banks, in application of the provisions of this Law, are treated as commercial banks, unless the Board of Directors excludes them from some provisions or measures.
For the purposes of enforcement of this Law and unless otherwise provided by law, all branches of any bank operating in the United Arab emirates are regarded as one bank.