The UAE Central Bank has announced a six-month suspension of a bank’s Islamic window from onboarding new customers. This decision also includes a fine exceeding Dh3.5 million ($953 632) due to the bank’s non-compliance with Sharia governance rules.

An Islamic window refers to a unit within a conventional bank that allows customers to engage in Islamic financial transactions. The suspension and fine were the result of a Sharia supervision examination conducted by the banking regulator, which identified breaches of compliance. The specific bank involved has not been named.

The Central Bank emphasized its commitment to ensuring that all banks and their employees adhere to UAE laws and regulations. It aims to maintain the integrity and transparency of the banking sector while safeguarding the overall financial system in the UAE.

In recent weeks, the Central Bank has intensified its scrutiny of regulatory compliance. On Tuesday, it imposed a Dh2 million fine on an exchange house for not following the country’s anti-money laundering and counter-terrorism financing (AML/CFT) policies.

Last month, the regulator fined another exchange house Dh100 million for “significant failures” in its AML/CFT framework. In May, a different exchange house faced a Dh200 million fine for similar infractions, while a branch manager was fined Dh500 000 and banned from working in any licensed financial institutions in the UAE.

Earlier this month, the European Commission removed the UAE from its list of countries considered high risk for money laundering. This change is part of the Emirates’ ongoing efforts to enhance its regulatory framework and follows the recommendations of the Financial Action Task Force (FATF).

The updated list by the European Commission is expected to come into effect after receiving “no-objection” from the European Parliament and the council within one month, which may be extended by another month. The FATF had previously removed the UAE from its “grey list” in February last year, recognizing the country’s significant reforms in preventing money laundering and terrorism financing.