UNION LAW No. (10) OF 1980 CONCERNING THE …

1 UNION LAW No. (10) OF 1980 CONCERNING THE CENTRALBANK, THE monetary SYSTEMAND organization OF BANKINGUNITED ARAB EMIRATESTHE COUNCIL OF MINISTERSG eneral SecretariatOFFICIAL GAZETTEO fficial GazetteUNION LAW No. (10) OF 1980 CONCERNING THECENTRAL BANK, THE monetary system ANDORGANIZATION OF BANKING10th Year - No. 82/2nd editionShawal 1400 H,August 1980 In The Name of God, Most Gracious, Most Merciful UNION LAW NO. (10) OF 1980 CONCERNING THE CENTRAL BANK, THE MONETARYSYSTEM AND organization OF BANKING.

2 *We, ZAYID BIN SULTAN AL-NAHAYAN, President of theUnited Arab Emirates, having perused the Interim Constitution;And UNION Law No. (1) of 1972 CONCERNING jurisdictions of theMinistries and powers of the Ministers and the amending lawsthereof;And UNION Law No. (2) of 1973 establishing the United ArabEmirates Currency Board;And UNION Law No. (7) of 1976 establishing the State AuditInstitution;And in accordance with the proposal of the Prime Minister ,approved by the Council of Ministers and ratified by theSupreme Council of the UNION ; Promulgated the following Law:DEFINITIONA rticle (1)In application of the provisions of this Law, and unless thecontext otherwise requires.

3 The following words andexpressions shall have the meanings cited against them below: The Government Is the Federal Government The Public Sector is the Federal Government, Govern-ments of the UNION s member Emirates,public institutions and organizations, * The Arabic text of this Law shall be the lawful and valid one, and. in caseof any differences or discrepencies between the Arabic version and the text inany other language, the Arabic text shall and companies fullyowned by the Federal Government or byGovernments of the UNION s memberEmirates The Minister : is the Minister of , Finance andIndustry.

4 The Bank : is the Central Bank of theUnited Arab Emirates. The Board ofDirectors : is the Board of Directors of the CentralBank of the United Arab Emirates. Chairman of theBoard of Directors : is the Chairman of the Board of Direc-tors of the Central Bank of the U. A. E. Member of theBoard : is the Member of the Board of Directorsof Directors of the Central Bank of theU. A. E The Governor : is the Governor of the Central Bank ofthe U. A. E. Currency : includes both notes and coins Currency notes and coins : Currency notes and coins issued by theBank under provisions of this Law orpreviously issued under UNION Law No.

5 (2) of 1973 establishing the United ArabEmirates Currency Board. Previously ExistingCurrency : Currency notes and coins issued by theCurrency Board of Bahrain and. theCurrency Authorities of Qatar and Dubai. ConvertibleForeign Currency : Any currency - other than the Dirham-the Bank deems convertible for the pur-pose of this Law. Special DrawingRights : Any Special Drawing Rights issued bythe International monetary Fund. Year Is the Gregorian calendar ONECENTRAL BANK: OF THE UNITED ARAB EMIRATESC hapter OneEstablishment of the Central BankArticle (2)There shall be established in the State of the United ArabEmirates a Central Bank to be known as the Central Bank of theUnited Arab Emirates.

6 The Bank shall be considered as a publicinstitution having its body corporate and enjoying the requiredjuridical capacity to conduct all operations and dealings, whichensure the attainment of the objectives for which it has (3)1) The operations of the Bank and the organization of its balancesheet and accounts shall be carried out in accordance with thecommercial principles of banking The Bank s dealings withother parties shall be considered as ) None of the provisions of the Laws governing the public ten-ders and auctions, public accounts and civil service, otherthan the Bank s own regulations, shall apply to the ) The preaudit provided for in Law No.

7 (7) of 1976 establishingthe State Audit Institution shall not apply to the Bank soperations. The Audit Institution shall limit itself to post-auditing of the Bank s operations and shall have no right tointerfere in conducting the Bank s operations or (4)The Bank shall have its main office in the Capital of the , Board of Directors may approve to open branches, offices,and agencies of the Bank in the member Emirates of the Unionand appoint agents and correspondents in the United ArabEmirates and TwoObjects of the BankArticle (5)

8 The Bank shall direct the monetary , credit and banking policyand supervise over its implementation in accordance with theState s general policy and in such ways as to help support thenational economy and stability of the the attainment of its objectives, the Bank shall:1) Exercise the privilege of currency issue in accordance withthe provisions of this Law;2) Endeavor to support the currency, maintain its stability inter-nally and externally, and ensure its free convertibility intoforeign ) Direct credit policy in such ways as to help achieve a steadygrowth of the national economy;4) Organize and promote banking and supervise over theeffectiveness of the banking system according to theprovisions of this Law;5) Undertake the functions of the bank of the Governmentwithin the limits prescribed in this Law.

9 6) Advise the Government on financial and monetary issues;7) Maintain the Government s reserve of gold and foreignexchange;8) Act as the bank for banks operating in the Country;9) Act as the State s financial agent at the InternationalMonetary Fund. The International Bank for Reconstructionand Development, and other international and Arab Fundsand Institutions. And carry on all dealings of the State withsuch ThreeCapital and Reserves of the BankArticle (6)1) The capital of the Bank shall be 300 (three hundred) millionDirhams fully paid up by the ) The capital of the Bank may be increased from time to timeby a UNION Decree issued on the proposal of the Board ofDirectors as displayed by the Minister and approved by theCouncil of Ministers.

10 In this case, the Government shall payup the decided ) No reduction of the Bank s capital shall be effected except bya (7)The Bank shall establish a General Reserve Account in thefollowing way:a) The Board of Directors shall at the end of each year deter-mine the Bank s net profits for the year after deductingoperational costs and making such provision as is necessaryfor the depreciation of assets and reserves, for bad anddoubtful debts. for contributions to the pension andtermination of service indemnity fund, and in general forother financial expenses normally provided for by banksfrom their net ) Net profits shall be posted to the General Reserve Accountuntil the balance thereof reaches four times the size of (8)Should the balance of the General Reserve Account reach theceiling specified in Paragraph (b) of the preceding Article, allnet profits shall after that revert to the (9)