UAE bank sanctioned

dubai — The Central Bank of the UAE announced an administrative sanction against a bank in the country for non-compliance of the apex bank’s specific instructions.

The regulator said sanctions takes into account the failure of the unnamed bank’s senior management to comply with the central bank’s instruction on executing a court order.

“The Central Bank of the UAE issued a caution against a bank operating in the UAE… a caution is an administrative sanction under the banking law. It was imposed in respect of non-compliance by the bank with the central bank’s instructions on executing a court order. The subject order required the bank to release, in a timely manner, attachments to two on-demand performance bonds,” it said in a statement.

“The bank’s senior management delayed the release pending the outcome of a legal dispute between the bonds’ applicant and beneficiary, urged by its client’s legal advisor. Such misconduct is a breach of the central bank’s notices [issued earlier].”

It said the administrative sanction also takes into account the duration of the breach and the bank’s deliberate frustration of the parties’ rights and obligations under the bonds.

As a result, this could erode the trust that contractors put in such bonds, the central bank said. “The central bank considers this as a justification for its decision to impose this sanction.”

The central bank on Monday revoked the licence of local money exchange firm Al Zarooni Exchange due to anti-money laundering compliance violations. The licence has been revoked with effect from January 10, and comes after a special examination of the firm, Reuters reported.