Regulatory Alerts2026-09-09
Added
Regulation No. 1/2026 for the Federal Decree by Law No. (50) of 2022 Concerning Promulgating the Commercial Transactions Law, Regarding Controls and Rules of Commercial Transactions of Islamic Financial Institutions and Takaful Companies
This Regulation No. 1/2026, issued by the Central Bank of the UAE, establishes controls and rules for commercial transactions of Islamic Financial Institutions and Takaful Companies, in implementation of Federal Decree by Law No. (50) of 2022. It defines terms like "Transgression," "Default," and "Direct Actual Damage," and outlines specific provisions for Islamic deposits, investment accounts, and various financing contracts such as Murabaha, Istisna', and Ijarah. The regulation clarifies that Islamic financial institutions do not acquire ownership of cash deposits allocated for investment and are not obligated to return their equivalent except in cases of transgression, default, or condition violation, while prohibiting the guarantee of investment account balances or profits. It also specifies that bank loans must not stipulate any increase, benefit, or interest, and details rules for installment sales and Murabaha contracts, including the requirement for fixed prices and the prohibition of purchasing financing subjects from the client or related parties for resale at a higher deferred price without significant change.
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