The Central Bank seeks to promote the effective and efficient development and functioning of the banking system. To this end, banks are required to manage their capital in a prudent manner. It is important that banks’ risk exposures are backed by a strong capital base of high quality in order to contribute to the stability of the financial system of the UAE.

In introducing these Capital Adequacy Regulations, the Central Bank intends to ensure that banks’ capital adequacy is in line with revised rules outlined by the Basel Committee on Banking Supervision in ‘Basel III: A global regulatory framework for more resilient banks and banking systems’, commonly referred to as ‘Basel III’. These Regulations are supported by accompanying Standards, which elaborate on the supervisory expectations of the Central Bank with respect to capital adequacy requirements.

These Regulations and the accompanying Standards are issued pursuant to the powers vested in the Central Bank under the Central Bank Law.

Where these Regulations, or their accompanying Standards, include a requirement to provide information or to take certain measures, or to address certain items listed at a minimum, the Central Bank may impose requirements, which are additional to the listing provided in the relevant article.