ع
The Federal Decree-Law No. 6 of 2025 on the Central Bank, regulation of financial institutions, activities and insurance business has strengthened the Central Bank of the UAE’s authority over supervision, intervention and resolution of distressed lenders, according to a CRI Consulting analysis published in June 2026. The legislation, which entered into force on 16 September 2025, replaced an earlier 2018 framework and now places greater emphasis on overall financial stability rather than isolated deposit guarantees. Enterprise coverage of the shareholder versus depositor dynamic in regional banks notes that such measures can constrain risk strategies that might otherwise boost shareholder returns. The updated rules maintain a compensation framework for depositors while introducing broader tools to prevent systemic disruptions, the consultancy assessment found.
Under the law, specialized judicial committees now handle smaller banking disputes up to AED 100,000 with binding decisions, a CRI Consulting report stated. This mechanism aims to resolve conflicts efficiently without lengthy court processes that could erode confidence among depositors. Regional regulators have increasingly recognized that unchecked pursuit of shareholder value through higher risk can undermine the stability that depositors rely upon, according to analyses of MENA banking governance.
In parallel developments across the region, Egypt’s new banking law established a Guarantee of Deposits Fund affiliated with the Central Bank of Egypt to protect client funds in case of institutional failure, a Matouk Bassiouny legal publication from January 2025 reported. The fund holds independent legal status and prioritizes depositor claims, potentially limiting distributions to shareholders during liquidation proceedings. Such structures reflect a common regulatory approach in the Middle East where depositor protection takes precedence to maintain public trust in the financial system.
Customer deposits at Egyptian banks expanded markedly in recent years, with the National Bank of Egypt, Banque Misr and Commercial International Bank adding a combined EGP 4.5 trillion over the three years through the end of 2025, FirstBank figures show. This surge in deposits, which reached EGP 15.09 trillion sector-wide by December 2025, underscores the scale of funds at stake and the importance of legal safeguards for retail and corporate clients. Industry data from the period illustrates why lawmakers have focused on balancing these liabilities against the equity interests of shareholders.
A study published in the journal Managerial Finance in 2021 examined how multiple large shareholders influence stability at MENA banks and found that the first and second largest shareholders often increase instability while the third can enhance it. The research, which covered 532 bank-year observations from 2004 to 2017, highlighted coalition effects that can exacerbate moral hazard problems at the expense of depositors and other creditors. Updated governance rules in the UAE and Egypt seek to address these dynamics through tighter oversight of risk-taking, according to subsequent regulatory reviews.
Kuwaiti banking law similarly subjects financial institutions to both company law and Central Bank of Kuwait regulations, limiting the ability of controlling shareholders to treat banks as ordinary commercial entities, a Law Gratis legal overview indicated. Oppression remedies available to minority shareholders must be weighed against the broader impact on depositors whose funds form the bulk of bank liabilities. Courts in Kuwait have upheld that banking companies remain accountable under general corporate mechanisms even amid specialized supervision, the analysis noted.
The evolving frameworks across the UAE, Egypt and other Gulf markets demonstrate a regulatory preference for preserving depositor confidence to support economic stability, according to aggregated assessments from legal and consulting firms. These measures do not eliminate shareholder rights but channel them within boundaries that prevent excessive risk at the expense of the wider financial system. Ongoing monitoring by central banks will determine how effectively the new rules mediate between these competing stakeholder groups.
