Small to Medium Sized Enterprises (SME) - Customer Protection Regulation

CBUAE Classification: Public
Small to Medium Sized Enterprises (SME)
Customer Protection Regulation

2
CBUAE Classification: Public
CONTENTS
Page Subject
Introduction 3
Objective 3
Scope 4
Article (1) Definitions 4
Article (2) Institutional and Governance Oversight 11
Article (3) Disclosure and Transparency 11
Article (4) Responsible Conduct 16
Article (5) Responsible Financing Practices 26
Article (6) Complaint Management and Resolution 27
Article (7) Customer Data Protection 29
Article (8) Compliance with Islamic Shari’ah Provisions 31
Article (9) Reporting to the Central Bank 32
Article (10) Cancellation of Previous Regulatory Instruments 32
Article (11) Enforcement and Sanctions 32
Article (12) Interpretation of Regulation 33
Article (13) Publication and Effective Date 33

3
CBUAE Classification: Public
Circular No.: 2026/2
Date: 17/02/2026
To: All Banks and Finance Companies
Subject: Small to Medium Sized Enterprises (SME) - Customer Protection Regulation

Introduction
The Central Bank is seeking to establish a framework for protection of small to medium-sized enterprises (SMEs) as Customers and enhance SMEs’ access to Financial Products and Services in the UAE, through promoting appropriate conduct by Financial Institutions when dealing with Customers.

This Regulation is issued pursuant to the powers vested in the Central Bank by the Federal Decree-Law No. (6) of 2025 Regarding the Central Bank, Regulation of Financial Institutions and Activities, and Insurance Business.

Objective
The primary objective of the Regulation is to protect Customers. The Regulation seeks to promote a culture within Financial Institutions of acting in the best interest of SMEs as Customers, by setting out requirements for Financial Institutions when dealing with Customers that include:

• Setting standards of business and market conduct by Financial Institutions;
• Strengthening the governance and oversight over the design, promotion and sale of Financial Products and/or Services;
• Promoting responsible financing practices;
• Ensuring the quality and timing of effective disclosure to Customers by Financial Institutions regarding matters and/or risks that may affect a Customer’s decision to purchase a Financial Product and/or Service;
• Promoting transparency by ensuring that Customers have timely and appropriate access to relevant and accurate information to support informed decision-making;
• Promoting Customers’ access to banking facilities;
• Implementing clear and reasonable mechanisms by Financial Institutions for redress of Customer Complaints;
• Providing appropriate support and communication for Customers in financial difficulties.

Scope
This Regulation applies to all Banks and Finance Companies licensed by the Central Bank in relation to their activities specified in Article (61) of the Central Bank Law (hereinafter referred to as ‘Financial Institutions’), including those which carry on the whole or a part of their business in Compliance with Islamic Shari’ah Provisions, in provision of Financial Products and/or Services to Customers.

Where this Regulation includes a requirement to provide information or take certain measures or to address certain items listed as a minimum, the Central Bank may impose requirements that are additional to the listing provided in the relevant Articles.

The Central Bank may issue further requirements relating to this Regulation.

Article (1): Definitions
The following terms shall have the meaning assigned to them below for the purposes of this Regulation:

1.1 Arrears: the state of being behind in the discharge of obligations, an unfinished duty and or an unpaid and overdue debt in accordance with the loan/financing contract, by the scheduled due date.

1.2 Authorized Agent: an external commercial representative of a Financial Institution, which undertakes to enter into transaction in the name and for the account of the Financial Institution. The Financial Institution shall be liable for any actions, transactions and contracts entered into by the Authorized Agent within the limits of the authority conferred to the Authorized Agent by the Financial Institution.

1.3 Bank: any juridical Person licensed in accordance with the provisions of the Central Bank Law and the regulations issued in implementation thereof, to primarily carry on the activity of taking deposits in addition to any of the other Financial Activities.

1.4 Bank Account: a transactional basic business account that allows the making of payment, deposit and withdrawal of funds.

1.5 Board: the board of directors of the Financial Institution. In the case of branches of a foreign Financial Institution, Board refers to the highest decision making body of the Financial Institution within the State, for example the Senior Management committee.

1.6 Central Bank: the Central Bank of the United Arab Emirates.

1.7 Central Bank Law: Federal Decree-Law No. (6) of 2025 Regarding the Central Bank, Regulation of Financial Institutions and Activities, and Insurance Business.

1.8 Complaint: an expression of dissatisfaction by a Customer with a Financial Product and/or Service, policy, procedure, or action of the Financial Institution that is presented to the Financial Institution in Writing or verbally.

1.9 Conflict of Interest: a situation where the interests of a client are at odds with the interests of the firm, an employee or another client.

1.10 Compliance with Islamic Shari’ah Provisions: refers to compliance with Islamic Shari’ah in accordance with:
a. The provisions stated in Part Six of Book Three of Federal Decree by Law No. (50) of 2022 Concerning Promulgating the Commercial Transactions Law, or any law replacing it; b. The provisions contained in the bylaws issued implementing Part Six of Book Three of the Federal Decree by Law No. (50) of 2022 Concerning Promulgating the Commercial Transactions Law and any law replacing it;
c. The resolutions, Fatwas and standards issued or approved by the Higher Shari’ah Authority in relation to businesses and activities of IFIs (“Higher Shari’ah Authority’s Resolutions”); and
d. The resolutions and Fatwas issued or approved by Internal Shari’ah Supervision Committee (“ISSC”) of the respective IFI, in relation to businesses and activities of such institutions (“the ISSC’s Resolutions”), provided they do not contradict the Higher Shari’ah Authority’s Resolutions.

1.11 Credit Information Agency: Etihad Credit Bureau Company and any credit information agency established for the purpose of credit reporting requirements.

1.12 Credit: a product that provides funding including any advance, loan/financing or other facility in whatever form, including the giving of a guarantee or undertaking of any surety obligation for a Customer.

1.13 Customer: a Small to Medium Sized Enterprise, including sole proprietors, that obtains or may prospectively obtain Financial Services and/or Products, with or without Fees, to satisfy business needs.

1.14 Customer Data: any information relating to an identified Customer or an identifiable Customer, i.e. a Customer which can be identified directly or indirectly, in particular by reference to an identification number or to other factor(s) specific to their identity.

1.15 Data: a collection of organized information, facts, concepts, instructions, observations or measurements, in the form of numbers, alphabets, symbols, images or any other form, that are collected, produced, or processed by Financial Institutions.

1.16 Error: an outcome of an action that is contrary to an agreement, understanding or documented policy or operational and control procedures, which has a financial or other effect on one or more Customers. ‘Error’ incudes a malfunction of a digital system, automation failures, and misprocessing.

1.17 Fee: any charges, penalties and commissions incurred on a Financial Product and/or Service.

1.18 Finance Company: a conventional finance company and/or an Islamic Finance Company licensed in accordance with the Finance Companies Regulation issued via Circular No. 3/2023 on 29/09/2023.

1.19 Financial Crime Compliance: includes compliance with, but not limited to, all applicable frauds, anti-money laundering, combating the financing of terrorism, sanctions, bribery and corruption laws, rules and regulations. This Regulation does not impose, reduce or modify any requirements pertaining to the compliance with all laws, rules and regulations relating to Financial Crime Compliance.

1.20 Financial Institution: a Bank or a Finance Company.

1.21 Financial Free Zones: zones subject to the provisions of Federal Law No (8) of 2004, Regarding Financial Free Zones, and amending laws, or any law replacing it.

1.22 Financial Products and/or Services: products and/or services (including stored value facilities) provided by Financial Institutions, with or without Fees, through their financial activities.

1.23 Higher Shari’ah Authority: An authority that exercises the mandates and authorities pursuant to the Central Bank Law.

1.24 Internal Shari’ah Supervision Committee (“ISSC”): a body appointed by the Islamic Financial Institution, comprised of scholars specialized in Islamic financial transactions, which independently supervises transactions, activities, and products of the Islamic Financial Institution and ensure its Compliance with Islamic Shari’ah Provisions in all its objectives, activities, operations, and code of conduct.

1.25 Islamic Finance Company: a Central Bank licensed company engaged in financing activities whose memorandum and articles of association include a commitment to apply Shari'ah provisions and to conduct its activities as per those provisions.

1.26 Islamic Financial Institution (“IFI”): a Financial Institution that conducts all or part of its activities and businesses in Compliance with Islamic Shari’ah Provisions.

1.27 Key Facts Statement: a concise and user-friendly summary, in plain language, of the key features and risks of a Financial Product and/or Services for a Customer.

1.28 Licensed Financial Activities: the financial activities subject to Central Bank licensing and supervision as specified in Article (61) of the Central Bank Law and the regulation issued in implementation thereof.

1.29 Market: the financial market where Financial Institutions promote and/or sell Financial Products and/or Services and compete for Customers.

1.30 Person: A natural or juridical Person, as the case may be.

1.31 Regulation: any resolution, legislation, circular, rule, instruction, standard or notice issued by the Central Bank.

1.32 Senior Management: the executive management of the Financial Institution responsible and accountable to the Board for the sound and prudent day-to-day management of the Financial Institution, generally including, but not limited to, the chief executive officer, chief financial officer, chief risk officer and heads of the compliance and internal audit functions.

1.33 Small to Medium Sized Enterprises (“SMEs”): small, micro and medium businesses, provided that the businesses meet the thresholds of employee headcount and turnover, as defined by the Cabinet Resolution No. 22 of 2016 on Unified Definition of Small and Medium Enterprises which sets out the Small to Medium sized Enterprise definition for the purposes of Federal Law No. 2 of 2014 or any subsequent amendments to the Federal laws defining an SME:
a. Micro Enterprise:
Trading Sector: not more than 5 employees; or annual revenues not exceeding AED 3 million; Manufacturing Sector: not more than 9 employees; or annual revenues not exceeding AED 3 million; Service Sector: not more than 5 employees; or annual revenues not exceeding AED 2 million. b. Small Enterprise:
Trading Sector: more than 6 employees up to a maximum of 50 employees; or annual revenues not exceeding AED 50 million; Manufacturing Sector: more than 10 employees up to a maximum of 100 employees; or annual revenues not exceeding AED 50 million; Service Sector: more than 6 employees up to a maximum of 50 employees; or annual revenues not exceeding AED 20 million.
c. Medium Enterprise:
Trading Sector: more than 51 employees up to a maximum of 200 employees; or annual revenues not exceeding AED 250 million; Manufacturing Sector: more than 101 employees up to a maximum of 250 employees; or annual revenues not exceeding AED 250 million; Service Sector: more than 51 employees up to a maximum of 200 employees; or annual revenues not exceeding AED 200 million.

1.34 Staff: one or more employee(s) of the Financial Institution or Third...