The UAE Central Bank imposed administrative sanctions on eight banks operating in the Emirates for failing to comply with its regulations related to the Nationals Defaulted Debts Settlement Fund.
The lenders did not comply with instructions not to grant any loans or credit facilities to beneficiaries of loans granted by the fund, including credit cards, the banking regulator said on Tuesday.
The unnamed banks were fined in accordance with “Article 137 of the Decretal Federal Law No (14) of 2018" related to the Central Bank and Organisation of Financial Institutions and Activities and the Central Bank notices pertaining to the beneficiaries of the fund's facilities.
It did not provide further details on the nature of the administrative sanctions.
The debt settlement fund was launched with an initial budget of Dh10 billion ($2.7 billion) in December 2011 to mark the country's 40th National Day.
The fund supports Emiratis struggling to meet payments on loans and credit cards.
The UAE Central Bank, “through its supervisory and regulatory mandates, works to ensure that all licensed financial institutions operating in the country, including banks, abide by the UAE laws, regulations and standards … to safeguard the transparency and integrity of the banks’ business and [enhance] the efficiency of the UAE financial system”, it said.
The UAE, the Arab world’s second-largest economy, has introduced a number of measures to regulate the country’s financial sector in recent months.
It has passed strict laws to prevent money laundering and the financing of terrorism, and has issued regulations over the years to clamp down on financial crime.
Earlier this year, the Central Bank issued guidelines for licensed financial institutions — including banks, finance companies, exchange houses, insurance companies, agents and brokers — to combat money laundering and the financing of terrorism.
The Central Bank is also penalising banks and exchange houses for failing to comply with its regulations.
Last year, it imposed financial sanctions on six banks operating in the Emirates for failing to comply with required due diligence and reporting procedures and standards related to the enforcement of certain provisions of the Organisation for Economic Co-operation and Development’s Multilateral Administrative Agreement for Automatic Exchange of Information and Common Reporting Standard.
In February, it revoked the licence of an exchange house operating in the Emirates and struck its name off the register due to regulatory misconduct and weak compliance.
Last year, the banking regulator also imposed a fine of Dh5.2 million on an exchange house in accordance with the law to combat anti-money laundering and the financing of terrorism and illegal organisations.