The Central Bank of the UAE (CBUAE) has issued two new regulations that apply to payment systems that operate in the UAE as well as payment schemes that provide clearing or settlement in Dirham outside of the country.
The central bank said in a statement that the new regulations, which address large-value payment systems (LVPS) and retail payment systems (RPS), apply to remittance systems operating in the UAE as well as payment schemes that provide clearing or settlement in dirham outside the country.
By the end of February 2022, companies running these systems, as well as settlement institutions of existing large-value payment systems and retail payment systems, must comply with the regulations, when the transition period ends.
Furthermore, the new laws will help to ensure the UAE’s “financial stability” and “consumer protection.” Both the regulations are now in effect.
“Payment systems are the plumbing of the financial system … a critical part of any country’s financial infrastructure. The issuance of these two regulations is an important milestone to reach our objective of providing robust, efficient, and accessible financial infrastructure in the UAE, serving our financial institutions, corporations, and people, and supporting our competitive economy. The large value and retail payments systems regulations will help facilitate smooth, secure, and efficient conduct of transactions. The retail payments regulation will also provide a level playing field to advance innovation and competition, and financial inclusion.”
The banking regulator in the UAE has taken several steps to boost consumer safety. In February, the central bank issued the country’s first financial consumer protection regulatory structure, which outlined the conduct expected from the Emirates’ licensed financial institutions.
According to the bank, the LVPS regulation sets standards for financial infrastructure systems that support wholesale payment activities in the UAE.
“The RPS law focuses on systems for retail payments, which provide funds transfer, clearing and settlement services related to retail activities. It covers all retail payment systems irrespective of currency or means of exchange in which the transactions are executed”, the CBUAE added.