UAE Central Bank bars Bank Melli Iran branches from Iran-linked transactions

The measure was announced on Wednesday, 23 September 2026, after examinations found regulatory breaches. In its statement, the central bank said the action followed violations linked to non-compliance with UAE rules on anti-money laundering, countering the financing of terrorism, and proliferation financing.

CBUAE said the enforcement steps were taken under Article (168-1-C) of Federal Decree-Law No. (6) of 2025 on the Central Bank, the regulation of financial institutions and activities, and insurance business. Powers sit with the Governor under the applicable laws and regulations.

The prohibition is specific. Branches of Bank Melli Iran that operate in the UAE may not run Iran-linked financial transactions. That includes trade finance and fund transfers to and from Iran. Coverage of the bank's UAE footprint varies slightly by outlet. The National, citing the bank's website, reports eight branches including a regional office. Reuters cites seven branches with a main office in Dubai. Bank Melli began operating in the UAE in 1969, according to Reuters.

The move comes after the UAE said last month it would suspend all trade, commercial exchange and financial transactions with Iran until further notice. That wider freeze followed regional security tensions, including attacks on UAE-owned tankers and Tehran's rejection of talks with the US, as reported by The National and Reuters. The neighbours have long kept substantial commercial ties. Iranian customs data cited in coverage put bilateral non-oil trade in the tens of billions of dollars in recent years, with the UAE a major corridor for Iranian imports and exports.

CBUAE said it continues to tighten supervision so licensed institutions meet compliance standards aligned with international practice. The UAE's 2024-2027 National Strategy for Anti-Money Laundering, Countering the Financing of Terrorism and Proliferation Financing sits behind that push. In 2023 the central bank also issued AML and CFT guidelines for banks, finance companies, exchange houses and insurers, including digital identification for customer due diligence.

Recent enforcement examples underline the stance. Last month CBUAE said it would run a special and urgent examination of Egypt's Banque Misr in the UAE after US money-laundering concerns. In June, a foreign bank branch in the UAE was fined 20 million dirhams (Dh20 million) for significant, repeated failures under the AML, CFT and sanctions framework. That was one of the largest such penalties reported, according to The National.

For customers and counterparties, the practical effect is immediate. Iran-linked payments, trade finance and transfers through Bank Melli Iran's UAE branches are barred under the central bank order. Anyone who used those channels for remittances or trade documents should expect disruption and will need alternative licensed routes that remain permitted under UAE rules. Check statements with your bank or exchange house before assuming a payment will clear.

The central bank framed the decision as protecting the soundness and integrity of the UAE financial system. It did not publish a reopening date for the restricted transactions.