New framework to enhance consumer protection from financial misconduct
Abu Dhabi: With implementation of Decretal Federal Law No. (14) Of 2018 regarding the Central Bank and Organisation of Financial Institutions and Activities, the mandate of the CBUAE expanded to include an overarching goal to protect consumers. Article 4 of the Law requires the Central Bank to establish regulations and standards to protect the consumers of licensed financial institutions.
In view of the above, the Central Bank has launched a consultation process with key stakeholders, aimed at developing a new Financial Consumer Protection Regulatory Framework. This Framework will strengthen the protection of financial consumers in the UAE through more comprehensive requirements to be met by all financial institutions that are subject to Central Bank supervision.
The Framework will include enhancements to the quality of disclosure and transparency, ensure timely responses to customer complaints and will require financial institutions to provide consumers with effective dispute resolution services.
CBUAE has set in place the foundations for its newly established Consumer Protection Department, which initiated an extensive review of consumers’ experiences with financial institutions in the UAE, and carried out benchmarking exercises with other central banks following international best practices.
H.E. Mubarak Rashed Al Mansoori, Governor of the Central Bank of the UAE, said: "Through this process, CBUAE will move forward with the development of a new Financial Consumer Protection Regulatory Framework to protect financial consumers.
The principles of the Framework include Disclosure and Transparency, Regulatory Supervision & Corporate Governance, Market Conduct, Business Conduct, and Protection of Consumer Data and Privacy. Moreover, the principles of Responsible Financing Practice, Complaint Management and Dispute Resolution, Consumer Education and Awareness and Financial Inclusion and Shari’ah Compliance for Financial Services, are essential for the development of a comprehensive framework.”
The consultation process, comments shall be reviewed, finalized and integrated in the proposed framework before presentation thereof to the Board of Directors for final approval.
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