On 13 September 2026, the Small to Medium Sized Enterprises (SME) Customer Protection Regulation (the “Regulation”), published by the Central Bank of the United Arab Emirates (CBUAE), came into force for UAE banks and finance companies. It sets out key banking standards, including a maximum timeframe for opening a bank account in the UAE once the applicant has supplied the required documents.
- Since 13 September 2026, UAE banks and finance companies licensed by the CBUAE must open basic business accounts for low-risk SMEs within three business days of receiving complete documentation.
- Banks may exceed that deadline only for financial crime compliance reasons, and must document and report the justification to senior management.
- Where other valid delays arise, an account can be opened with restrictions for up to two weeks, with incoming funds held blocked.
- Refusals must be explained in writing unless linked to financial crime risks, and banks must log rejection reasons and average opening times for the Regulator.
- The rules also ban account closure fees after six months, tied product sales, and obstruction of customers switching banks.
Objectives and Scope of the Regulation
The CBUAE SME Customer Protection Regulation, approved by Circular No. 2/2026 dated 17 February 2026, is mandatory for all banks and finance companies licensed by the Central Bank of the UAE. However, it does not bind financial institutions licensed by other regulators (for example, DFSA or FSRA in the financial free zones of DIFC or ADGM, respectively). The CBUAE Regulation repeals and replaces the previously effective equivalent document, the SME Market Conduct Regulation (Circular No. 1/2021 dated 26 January 2021).
The purpose of the new Regulation is to protect customer interests and to foster a culture within financial institutions of acting in the best interests of small and medium-sized enterprise (SME) customers.
“Customers” are defined as small and medium-sized enterprises as well as sole traders seeking financial products or services to achieve their business objectives. To classify a customer as an SME, the criteria set out in Cabinet Resolution No. 22 of 2016 (enacted under UAE Federal Law No. 2 of 2014 on Small and Medium Enterprises) are applied:
| Enterprise Type | Threshold Criteria |
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Micro-enterprise (trade sector) |
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Micro-enterprise (manufacturing sector) |
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Micro-enterprise (services sector) |
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Small enterprise (trade sector) |
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Small enterprise (manufacturing sector) |
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Small enterprise (services sector) |
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Medium enterprise (trade sector) |
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Medium enterprise (manufacturing sector) |
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Medium enterprise (services sector) |
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Timeframe for Opening a Bank Account in the UAE
The Regulation establishes the timeframe for opening a bank account for an applicant under normal circumstances. For these purposes, “bank account” is understood as “a transactional basic business account that allows the making of payment, deposit and withdrawal of funds” (Article 1.4).
Article 4.46 of the Regulation gives UAE banks three business days to open an account, provided that:
- the customer profile is assessed as low-risk for anti-money laundering purposes; and
- the bank is satisfied with the submitted documents required for standard Customer Due Diligence.
The three-day timeframe within which the account opening process must be completed runs from the date on which the customer submitted the application along with all documents and information required by the bank to open the account.
A bank may deviate from the obligation to open an account within three business days if it needs to comply with applicable UAE financial crime prevention requirements (covering anti-money laundering, anti-corruption, sanctions, and other regulations). However, the justification for such an extension of the prescribed timeline must be documented and reported to the bank’s senior management.
Introducing a three-day deadline to complete the account opening procedure in the UAE – where documents are in order and the risk level is low – is an important step towards streamlining the onboarding process for SMEs. Such customers, including UAE free zone companies, account for a significant proportion of applicants opening accounts for the first time, yet often face lengthy application processing times or account refusals.
“Deferred” Account Opening
If an application for a bank account is approved, but “valid circumstances” (unrelated to financial crime compliance requirements) require additional time to open the account, the bank is obliged to explain the reasons for the delay to the customer and document them.
In such cases, the bank may open the account and provide the customer with an account number (provided the customer is classified as low risk). However, restrictions may be imposed on the account (such as limits on the number of transactions, prohibitions on transfers and payments, or the use of cheques) until the circumstances causing the delay are resolved or the missing documents are submitted. Such a delay in account opening must not exceed two weeks (Article 4.48).
During the onboarding stage, the bank may accept funds into the account (Article 4.51); however, these funds remain blocked until all account opening requirements have been met (which the bank must notify the customer of in writing).
Refusal to Open a Bank Account in the UAE
In the event of a refusal to provide a financial product or service (including a refusal to open an account), the Regulation obliges banks to inform the applicant of the reason for the refusal in writing.
A bank may refuse to open an account without giving reasons only when the refusal relates to financial crime risks or if such disclosure is prohibited by applicable laws or regulations (Article 3.12).
In the context of account opening timelines, as well as grounds for delays and refusals, CBUAE expects banks to maintain records of:
- customer requests to open accounts;
- accounts opened;
- rejected applications and the reasons for their rejection;
- average account opening times;
- the number of applicants classified as low, medium, or high risk for anti-money laundering and counter-terrorist financing purposes;
- instances where account opening for low-risk customers was not completed within three business days, along with a description of the valid reasons for the delay.
Reports containing these metrics must be regularly submitted (at least quarterly) to the bank’s senior management and board of directors, as well as provided to the Regulator upon request (Article 4.52). This places the timelines and grounds for refusal established by the Regulation under regulatory oversight.
A bank violating the provisions of the Regulation may be subject to supervisory action, administrative action, and/or financial sanctions by the Central Bank. Such actions and sanctions may include restricting or revoking the powers of the bank’s senior management or board members, appointing the interim management of the bank or barring individuals from the UAE financial sector (Article 11).
Documents Required for Opening an Account in the UAE
Although individual bank requirements in the UAE may vary, the Regulation mandates that prospective customers be clearly informed about the compulsory list of documents to be submitted.
Under Article 4.49 of the Regulation, financial institutions in the UAE must disclose clearly, transparently, and consistently the minimum documentation requirements for a customer to open a bank account and during subsequent ongoing due diligence.
This refers specifically to the minimum set of documents which are mandatory in all cases. However, the list of required documents for a specific customer may be broader depending on the risk category assigned by the bank. In practice, thorough preparation of the banking compliance document package is a key task when opening a corporate account in the UAE.
Switching Banks in the UAE
The Regulation prohibits UAE banks from obstructing customer mobility – that is, the simple transition of customers to another bank for a reasonable, disclosed fee and within a reasonable timeframe (Articles 4.33 – 4.36).
At the customer’s request, the bank must forward a request to another bank to transfer accounts, financial products, or services. The bank must facilitate this process (including the secure transfer of customer financial information) within a reasonable timeframe and without charging additional fees.
The bank is not entitled to demand that the customer explain the reasons for their decision to switch banks. Such information may only be requested if the bank identifies financial crime risks (where relevant evidence or suspicions exist).
To retain a customer, the bank may send special offers in writing. However, unless the customer withdraws their request to transfer funds or close the account, the bank is obliged to complete these procedures within the originally agreed timeframe.
Provision of Information to Customers
Article 3 of the Regulation requires banks to inform customers comprehensively about their products and services. Banks must provide accurate, complete, consistent, and non-misleading information. The customer must be given sufficient time to review the information, including the terms and conditions of the product or service. Information disclosed to customers through any communication channel must be made available in both English and Arabic.
Prior to providing a financial product or service to a customer, the bank is required to (Article 3.4):
- provide the customer with a comprehensive list of all documents and information required from the customer for the bank to offer the product or service;
- provide the customer (prior to their decision) with all documents and information necessary to understand the features, pricing, benefits, risks, fees, customer rights and obligations, and potential consequences of late payment or non-payment associated with the financial product or service;
- provide the customer with a Key Facts Statement (a short plain-language summary of a product’s main features and risks) prior to entering into a contract;
- inform the customer of all reasonable options, enabling them to compare these with the proposed financial product or service;
- explain to the customer and provide full written information on all stages of the process for providing the product or service or reviewing the application, including expected timelines;
- keep the customer informed of the application status at all stages and of the final decision regarding the application.
Customers must be notified in advance of any changes to service terms and conditions at all stages of the relationship. If a bank changes the terms for providing a product or service (including fee amounts), it is obliged to give the customer written notice at least 60 calendar days before such changes take effect (Article 3.10). Where a product or service is subject to annual automatic renewal, the bank must inform the customer of the scheduled renewal at least 30 calendar days before the renewal date. Article 3.11 also requires the notice to explain how and when the customer can cancel the automatic renewal.
Banking Fees
Banks must provide customers with full disclosure of all applicable fees (one-off and recurring) for financial products or services, specifying the frequency and schedule of charges. They must also disclose any correspondent bank or other third-party fees, where applicable. If information regarding applicable fees is unavailable, the bank must provide an estimated amount or range, accompanied by a disclaimer stating that the fees are not final (Article 3.9).
Key principles governing bank fees (Articles 4.39 – 4.45) include the following:
- fees must be fair, reasonable, and proportionate: they should reflect the actual costs incurred by the bank and have regard to the size of business and financial capacity of the customer of the relevant category;
- the bank must provide the customer with a schedule of applicable fees upon the sale of a financial product or service, at contract signing, and at any time upon request;
- the bank may not charge fees for performing statutory duties (including updating customer identification documents);
- fees may not be charged for issuing original paper statements to customers;
- account closure fees (penalties) are prohibited if the account has been open for six months or more.
Responsible Conduct and Non-Discrimination
The Regulation requires UAE banks to ensure professional and ethical conduct from their staff, prohibiting abusive sales, marketing, and pricing practices (Articles 4.4 – 4.14). Specifically, banks are prohibited from:
- engaging in aggressive sales practices that exploit customer vulnerabilities or lack of knowledge;
- imposing onerous contractual terms;
- tying the sale of one financial product or service to the purchase of another product or service;
- benefiting from errors made by the bank (in which case the customer must be informed immediately of the cause of the error and the remediation of its effects).
A bank’s internal code of conduct must incorporate non-discrimination principles in dealing with customers (Article 4.31), including when considering account opening applications, regardless of the business size, profitability, market position, nationality of owners, operational tenure, or business activity (subject to acceptable risk levels under anti-money laundering legislation).
With respect to lending, the Regulation prohibits granting credit in amounts exceeding what the customer is capable of servicing based on the bank’s assessment. Furthermore, offering or extending any form of credit without a prior written request from the customer is prohibited (Articles 5.1 – 5.2).
Communication and Support for Borrowers in Financial Difficulty
Banks must proactively engage with customers experiencing credit arrears to discuss financial difficulties that have arisen. Mechanisms for debt restructuring, loan modification, or payment schedule adjustments must be provided for such customers.
Banking standards and procedures must prevent excessive pressure on customers during debt recovery, including in terms of the frequency, timing, and method of communication. All customer interactions must be recorded and retained for five years following full repayment or write-off of the credit facility.
Handling Customer Complaints
Banks must ensure accessible, transparent, and fee-free handling of customer complaints to achieve prompt and fair resolution. To this end, an independent complaint-handling function directly accountable to senior management must be established.
The bank is required to acknowledge receipt of a complaint in writing within two business days of receiving it and provide the customer with a unique reference number to track the complaint status.
A final written response to the complaint must be provided to the customer no later than 30 business days from receipt (unless another timeline is specified by the CBUAE). This response must:
- clearly uphold or reject the complaint (in whole or in part) and, where appropriate, include compensation offers;
- provide detailed reasons for rejecting the complaint (except where doing so relates to financial crime compliance obligations or is otherwise prohibited by law);
- if the complaint is not resolved to the customer’s satisfaction, inform the customer of the procedure for escalating the dispute to an external financial dispute resolution body, including the Ombudsman Unit (Sanadak).
How Does the New CBUAE Regulation Benefit Businesses?
The new Regulation provides faster and fairer access to banking services for small businesses and entrepreneurs in the UAE. While the three-day account opening timeframe, the bank’s obligation to explain delays, and the requirement to justify refusals do not in themselves guarantee unimpeded account opening, they establish a clearer framework for bank-customer interactions during onboarding. Crucially, in all cases where a bank identifies heightened risks or must comply with statutory requirements, it is not bound by strict deadlines.
The Regulation requires transparency and predictability in service terms. Before entering into a contract, banks must disclose full and clear information about a financial product or service, including pricing, fees, risks, and available alternatives. Customers must be given advance written notice of any changes to terms or automatic contract renewals. Other provisions of the Regulation – such as the ban on aggressive sales tactics, and the rules on bank switching, debt collection, complaint handling, staff training and data protection – further show the UAE banking Regulator’s commitment to a customer-centric approach for SMEs.
Opening a bank account is a vital step following company incorporation in the UAE, essential for launching full business operations. As before, it requires Customer Due Diligence (CDD), risk assessment, and document requests by the bank. The new Regulation brings greater structure to account opening procedures, encouraging banks to prioritise convenience and the interests of business clients.
