A new regulation was posted to the Official Gazette from the Central Bank on March 31st 2021 and now come in to effect on April 30th 2021 outlining, precautionary requirements and behavior for specialized banks.
The Central Bank stated that banks and financial institutions would be held responsible for bearing the cost of compensation for those who have been directly as a result of the breach of his data, unless it is proved that the losses occurred due to gross negligence or fraudulent behavior on the part of consumers.
According to the new consumer protection system, recently issued by the Central Bank, licensed financial institutions must have appropriate security protection and monitoring procedures in order to discover and track any unauthorized internal access or use of consumer information, and any violation of the right of access or misuse must be recorded and notified to the Central Bank.
The Central Bank outlined that specialized banks are the banks licensed under the new system of the Central Bank, which can practice various financial activities to UAE citizens and residents only.
The new system for specialized banks aims to provide a regulatory framework, through which “specialized banks” should operate to avoid any risk to consumers and to ensure the use of the latest technology across the financial sector.
According to the law, licensed financial institutions must implement effective administrative and commercial practices in order to provide protection within the first line of defense.