Banking in the UAE comes with its own vocabulary — acronyms, regulatory terms, and financial concepts that can be confusing for business owners who are not banking professionals. This glossary provides plain-English definitions of the terms you are most likely to encounter when dealing with UAE banks, financial institutions, and regulators.
Regulatory and Compliance Terms
AML (Anti-Money Laundering): The set of laws, regulations, and procedures designed to prevent money laundering. UAE banks are required to apply AML controls to all customers and transactions. KYC (Know Your Customer): The process through which banks verify the identity, business activities, and risk profile of their customers. UBO (Ultimate Beneficial Owner): The individual(s) who ultimately own or control a business, directly or indirectly.
AECB (Al Etihad Credit Bureau): The UAE national credit bureau, which maintains credit reports for both individuals and businesses. CRS (Common Reporting Standard): The OECD framework for automatic exchange of financial account information between tax authorities — which includes the UAE.
Banking Products and Instruments
LC (Letter of Credit): A bank's commitment to pay a seller upon presentation of compliant documents — the foundation of international trade finance. BG (Bank Guarantee): A bank's unconditional commitment to pay a beneficiary if the bank's customer fails to fulfil a contractual obligation. CAF (Current Account Facility): A business overdraft — a pre-approved credit limit allowing the current account balance to go below zero.
WPS (Wage Protection System): UAE's mandatory system for processing and reporting employee salary payments. SIF (Salary Information File): The standardised data file submitted to the bank for WPS payroll processing.
Financial and Economic Terms
EIBOR (Emirates Interbank Offered Rate): The benchmark interest rate at which UAE banks lend to each other — the reference rate for most UAE variable-rate lending. LTV (Loan-to-Value): The ratio of a loan to the value of the underlying asset — used in mortgage and asset finance. DPO (Days Payable Outstanding): A measure of how long a business takes to pay its suppliers.
EOSB (End-of-Service Benefit): The mandatory gratuity payable by UAE employers to employees on termination — calculated at 21 days basic salary per year for the first five years. ECI (Etihad Credit Insurance): UAE's official export credit agency.
Free Zone and Regulatory Bodies
DMCC (Dubai Multi Commodities Centre): One of UAE's largest free zones, headquartered in Jumeirah Lakes Towers, Dubai. DIFC (Dubai International Financial Centre): UAE's financial free zone and hub for international banks and financial services firms. ADGM (Abu Dhabi Global Market): Abu Dhabi's international financial centre and free zone.
CBUAE (Central Bank of UAE): The UAE central bank and primary banking regulator for onshore banks. MOHRE (Ministry of Human Resources and Emiratisation): The UAE government ministry responsible for labour regulation, including WPS.