The UAE Central Bank has suspended the Islamic window of a bank operating in the country from onboarding new customers for six months and also fined it more than Dh3.5 million ($953,632) for non-compliance with Sharia governance rules.
An Islamic window is a unit within a conventional bank through which customers can conduct Islamic financial business.
The sanctions were imposed following the banking regulator's Sharia supervision examination, which found breaches by the bank, the Central Bank said on Wednesday. The name of the lender was not disclosed.
“The Central Bank, through its supervisory and regulatory mandates, endeavours to ensure that all banks and their staff, abide by the UAE laws, regulations and standards … to maintain transparency and integrity of the banking sector and safeguard the UAE financial system,” it said.
The banking regulator has been cracking down heavily on regulatory non-compliance in recent weeks.
On Tuesday, it imposed a Dh2 million fine on an exchange house for failing to comply with the country's anti-money laundering and counter-terrorism financing (AML/CFT) policies and procedures.
Last month, it also imposed a Dh100 million fine on an exchange house for “significant failures” in its AML/CFT framework and related regulations.
It also fined an exchange house Dh200 million for the same offence in May. A Dh500,000 fine was also imposed on a branch manager, who was banned from working in any licensed financial institutions in the UAE.
Earlier this month, the European Commission, the EU's main executive body, removed the UAE from its list of countries that pose a high risk for money laundering, amid growing efforts by the Emirates to boost its regulatory framework.
The commission said the list was updated after taking into account the work of the Financial Action Task Force.
The updated list will come into force after it receives “no‑objection” from the European Parliament and the council within one month, which can be extended for another month.
The FATF, the global body that combats money laundering and terrorism financing, removed the UAE from its “grey list” in February last year after significant progress on reforms. The Emirates was placed on the grey list in 2022.
