CBUAE: A Future-ready Central Bank Set to Drive Digital Transformation
Embracing digital transformation, the central bank has positioned itself as a future-ready institution, driving the UAE's vision to become a global financial hub. It not only takes appropriate steps to ensure competitiveness and transparency, but also promote Islamic finance in line with the UAE's sustainable economic agenda.
Khaled Mohamed Balama, Governor, Central Bank of the UAE (CBUAE), in annual report of 2024 said the central bank continued its journey of excellence and leadership last year and it was reflected in the achievement of exceptional milestones such as the issuance of legislations and regulations to enhance regulatory and supervisory framework; guidance to ensure compliance, improve the governance of licensed financial institutions and efficiently manage risks.
'We are proud to work on the launch of the 'Open Finance Platform', which will be the first platform of its kind globally and distinguished by unique features that take into account the interests of consumers and ensure enhanced customer experiences,' the Governor said.
'We also continue to develop our 'Supervisory Technology Platform', which aims to enhance the efficiency and effectiveness of supervisory operations by automating certain activities and providing access to more insightful regulatory data,' he added.
In addition, in line with the vision and directives of the wise leadership on the future of government services and its transformation into a global model, the CBUAE worked to achieve the objectives of the nation-wide ' Zero Government Bureaucracy' programme through improving the quality of services in the financial sector.
Under the Financial Infrastructure Transformation (FIT) programme, with an 85 per cent completion rate by 2024, the CBUAE introduced groundbreaking initiatives like the Digital Dirham and Central Bank Digital Currency (CBDC), showcased during the anniversary via a cross-border payment on the mBridge platform. The 'Aani' instant payment platform and 'Open Finance' further enhance seamless, secure transactions, fostering financial inclusion in the country.
As part of its digital transformation strategy, the central bank has successfully integrated advanced technologies such as blockchain, artificial intelligence, cloud technologies and digital currencies, enhancing operational efficiency, transparency, and accessibility. This proactive approach ensures that financial services are readily available to all segments of society, promoting financial inclusion and literacy.
Pioneer in Islamic Finance
The central bank has also been a pioneer in Islamic finance, aligning its banking practices with ethical and Shariah-compliant principles. This commitment has not only diversified the financial sector but also attracted investments from local and international markets, fostering growth and stability.
The UAE Islamic banks' assets have crossed the Dh1 trillion mark in 2024, which shows success of the CBUAE policy initiatives as well as confidence of global investors on its Shariah-compliance banking. The share of Islamic banks in the total banking assets was 24 per cent as of end-2024, according to the global rating agency Moody's Ratings.
'Currently, the banks in the UAE operate in a stable environment supported by diversification efforts and structural reforms which will continue to promote growth in the non-oil economy,' said Moody's analysts.
On May 6, the UAE announced plans to significantly increase the assets of Islamic banks in the federation and value of locally listed sukuk by 2031. Specifically, the government aims to increase the assets of Islamic banks to Dh256 trillion ($697 billion) from Dh986 billion ($268 billion), the total amount of listed local Islamic sukuk to more than Dh660 billion ($180 billion) and the total amount of international sukuk to Dh395 billion ($108 billion). In 2024, $12.7 billion of sukuk was issued in the UAE, of which the UAE banks issued $4 billion, according to Moody's.
'The projected increase in Islamic banking assets will cement the UAE's position as the third-largest contributor to the Islamic finance market,' it said.
Analysts and financial sector experts attribute the success of the UAE's conventional and Islamic banks to central bank and said it is only possible due to solid foundation laid down by the CBUAE. Referring to latest data by Kamco Invest, they said the UAE-listed banks have retained their supremacy in the Gulf region as they once again topped in GCC with the highest return on equity at the end of January-March 2025 quarter at 16.6 per cent.
'The UAE banks once again ranked first in the GCC in terms of Net Interest Margins (NIMs) that reached 3.34 per cent in first quarter of 2025 as compared to 3.39 per cent during the fourth quarter of 2024. The UAE-listed banks showed the biggest absolute growth in net profits with an increase of $639.6 million or 11.8 per cent during the quarter,' Kamco Invest, a financial consultancy, said in its first-quarter report.
Looking ahead, the central bank aims to continue its leadership role in shaping a robust financial ecosystem, leveraging digital innovation and Islamic finance to navigate the challenges of the global economy. As the bank celebrates its golden anniversary, the institution stands poised to embrace new opportunities, ensuring sustainable economic development for future generations.
In January, the Central Bank of the United Arab Emirates (CBUAE) has announced the issuance of silver coins to mark the bank's golden jubilee. The CBUAE's 50th anniversary silver coin embodies its achievements in developing the banking and financial sector over the past decades.
The CBUAE has issued 3,000 of these commemorative coins, each weighing 60 grammes. The obverse features the image of The President His Highness Sheikh Mohamed bin Zayed Al Nahyan surrounded by his name in Arabic and the phrase 'President of the United Arab Emirates'. The coin's reverse features an illustration of the CBUAE building, along with the phrase '50 Years of the Central Bank of the UAE' on the upper and lower edges in Arabic and English, the years 1973-2023, and the nominal value of Dh50.
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