The Central Bank stated that banks and financial institutions are responsible for bearing compensation for the direct costs incurred by the consumer 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.
In addition, the Central Bank issued a new regulation covering licensing, precautionary requirements and behavior for specialized banks, and the new system was published in the Official Gazette on March 31, 2021, and came into effect on April 30, 2021.
In detail, the Central Bank emphasized that banks and financial institutions are responsible for bearing compensation for the direct costs incurred by the consumer as a result of breaching his data, unless it is proven that the losses occurred due to gross negligence or fraudulent behavior on the part of consumers.
A high-ranking banker told Emirates Today, who preferred not to be named, that (the Central Bank) obligated banks, according to the new system, to exert all due diligence to protect customers’ accounts and data by applying the latest technologies related to information security, but in return the customer must himself, Pay attention to misleading messages and links used by fraudsters, and not respond to or respond to their messages.
He added: “There are many cases of penetration that are carried out as a result of recklessness by some customers, who are behind fake offers related to prizes or other things, despite the multiple awareness campaigns launched by the Central Bank and the Federation of Banks, in cooperation with the police,” noting that these cases are not responsible for the banks Where the customer compensation.
This came as a response to bank clients’ exposure to hacking their accounts and withdrawing money from them, without the banks stopping the completion of transactions, despite the presence of sufficient time for that, and recovery of these sums will take no less than three months.
According to the new consumer protection system, which was 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. Or unauthorized release of information, including any damage resulting from this violation, for future reporting and review by the Central Bank.
According to the law, licensed financial institutions must notify the Central Bank of all gross violations of consumer data and information, and notify consumers, without any undue delay, of any breach of personal data, as the breach may pose a threat to the financial and personal security of the consumer.
According to the law, financial crimes, misuse of consumer assets, data and information undermine consumers’ confidence in financial services, and licensed financial institutions must implement sound and effective administrative and commercial practices in order to provide protection within the first line of defense.
The Central Bank stated that the licensed financial institutions must make efforts and continuously inject appropriate investments to control these risks, and that they must use the latest technologies and solutions to protect consumer assets and data.
In addition, the UAE Central Bank issued a new regulation covering licensing, precautionary requirements and behavior for specialized banks, and the new system was published in the Official Gazette on March 31, 2021, and came into effect on April 30, 2021.
The Central Bank stated in a statement yesterday that the specialized banks are the banks licensed under the new system of the Central Bank, which are allowed to practice various financial activities, such as opening accounts, issuing cards, and providing financing to individuals and institutions, to meet the needs of the local community, pointing out that it is allowed For banks specialized in providing services to UAE citizens and residents only.
Specialized banks are permitted to conduct their activities in UAE dirhams only, and operate according to a low credit risk model.
The new system for specialized banks aims to provide a regulatory framework, through which “specialized banks” will be able to operate in an active and insightful manner in the financial sector of the UAE.
The Central Bank stresses the importance of the specialized banks ’compliance with all regulations, standards and circulars issued by it to the banking sector, except for cases in which there are specific provisions contained in the new system, and they apply to specialized banks only.
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