ADGM Digital Banking License

Category 1

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Strategic advisory for ADGM Digital Banking and fintech authorisations

The ADGM Digital Banking License is probably one of the best opportunities within the ever-changing landscape of fintech and banking within the wider Middle East region. In effect, the license offered by the Abu Dhabi Global Market (ADGM) and the Financial Services Regulatory Authority (FSRA) allows applicants to set up a fully regulated digital bank within the emirate under a framework recognized across the world.

Finjuris offers strategic end-to-end advisory services to entrepreneurs, financial organizations, fintech institutions, and tech-driven banking entities looking to acquire an ADGM Category 1 banking license to establish a digital bank in the UAE’s most advanced financial free zone.

Get your hands on Abu Dhabi Global Market’s Category 1 Digital Banking License with the guidance of Finjuris. In order to obtain this license, you must apply for authorisation from the Financial Services Regulatory Authority (FSRA).

The FSRA is the independent regulator responsible for the authorisation, supervision, and ongoing oversight of all financial services firms operating within the ADGM.

About ADGM Digital Banking License

The Abu Dhabi Global Market (ADGM) has announced its intention to accept applications for Digital Banking Licences, marking a significant step in the development of the UAE’s regulated fintech and banking ecosystem.

A digital bank is a regulated financial institution that

Accepts deposits

Provides credit

Conducts related banking and financial services

These activities are carried out primarily through digital, online, or electronic channels, rather than through physical branch-based customer interaction. Digital banks typically leverage technology to deliver innovative customer experiences, operational efficiency, and new transactional models.

Unlike fintech payment licences or advisory permissions, a digital bank operates as a fully regulated credit institution, subject to the highest prudential and governance standards under the FSRA rulebook.

ADGM’s digital banking framework reflects international best practices drawn from Basel III, global banking supervision standards, and advanced fintech regulatory regimes.

Licence Category & Capital Requirements

Digital banks in the ADGM are authorised under a Category 1 licence, the highest prudential category under the FSRA framework.

Licence Category: ADGM Category 1 Banking Licence

All digital banks across ADGM are authorized under a Category 1 banking licence, which is the top prudential licence under the FSRA licence spectrum

ADGM Category 1 licence enables the holder to:
01

Accept deposits from customers

02

Engage in lending and credit practices

03

Provide Payment and Settlement Services

03

Full banking services, subject to FSRA approval

This category has the strongest level of regulation, which corresponds to the systemic importance of banking institutions.

Minimum Capital Requirements

Base Capital Requirement: USD 10 million

This represents the minimum threshold only. In practice, the FSRA is likely to apply a Risk-Based Capital Minimum, calculated based on the full risk profile of the proposed digital bank.

This includes:

Common Equity Tier 1 (CET1) ratio: minimum 6%

Tier 1 capital adequacy ratio: minimum 8%

Capital Conservation Buffer: 2.5%

Minimum leverage ratio:
3%

The final capital requirement will depend on the bank’s:

Business model

Product mix

Technology infrastructure

Credit, operational, and market risks

Cost of Digital Banking License in ADGM

The cost of a digital banking license in ADGM consists of several components

Regulatory Application and Authorisation Fees

These are payable to the FSRA and reflect the complexity of Category 1 banking supervision.

Ongoing Supervision and Regulatory Levies

Digital banks are subject to annual FSRA supervision fees, which increase based on operational scale.

Capital Requirements

The most significant financial commitment is regulatory capital, which typically exceeds the USD 10 million base threshold.

Professional and Operational Costs

Including:

  • Legal and regulatory advisory
  • Technology infrastructure
  • Staffing and compliance
  • Office and operational setup

Finjuris assists clients in forecasting realistic end-to-end costs before formal submission.

Mandatory Appointments

The FSRA requires digital banks to appoint a full senior management and control function team. Mandatory appointments include

Licensed Directors

The FSRA closely reviews the composition, experience, and independence of the Board

Senior Executive Officer (SEO)

Must be UAE resident

Compliance Officer

Must be UAE resident

Money Laundering Reporting Officer (MLRO)

Must be UAE resident

Finance Officer
Senior Management Roles, including (as applicable):
  • Business Heads
  • Chief Risk Officer (CRO)
  • Chief Technology Officer (CTO)

All individuals are subject to FSRA fit and proper assessments.

Technology, Cybersecurity and Operational Readiness

Digital banks should have a high level of technological capability and robustness. The FSRA particularly gives importance to:

Core Banking Systems

Data protection and cybersecurity

Cloud and outsourcing governance

Business continuity- disaster recovery

Third Party Risk Management

Further, it is necessary to provide evidence of how technology risks are monitored and mitigated in the organization, both in terms of the board and operations.

Digital Bank License in Abu Dhabi

Why ADGM?

ADGM has emerged as the leading financial innovation hub in the UAE. The ADGM has also presented several strategic advantages to organizations looking to take up a digital bank license:

  • A system of common law, directly applicable and interpreted in English
  • An Independent Financial Regulator with Expertise in International Banking
  • Alignment to global capital adequacy and risk management standards
  • Direct access to regional and international financial markets
  • A regulator that is open to new technology-based banking models, with robust controls

These factors make ADGM an attractive proposition for digital-only banks, platforms for embedded finance, and fintech groups.

FSRA Digital Banking Authorisation Process

The FSRA digital banking authorization is multistage in nature and works like a regulatory filtering process to ensure that only credible, well-prepared applicants come in.

Step 1: Pre-Application Engagement

Applicants are strongly advised to have early consultations with various advisors, like Finjuris, to:
  • Regulatory classification verification
  • Align business model with FSRA expectations
  • Capital and governance gaps are identified

Early engagement dramatically reduces regulatory friction.

Step 2: Submission of Formal Application

The application comprises:
  • A comprehensive business plan
  • Financial projection and capital modelling
  • Governance and risk frameworks
  • Technology and outsourcing documentation
  • Policies on AML/CFT
  • Profiles of senior management

A complete review of the submission is done by FSRA.

Step 3: Regulatory Review and Challenge

During review, the FSRA may:
  • Issue clarification requests
  • Interview Senior Management
  • Require enhancements to policies or systems

This stage is iterative and needs strong regulatory engagement.

Step 4: In-Principle Approval and Licensing

Once this requirement is satisfied, the FSRA issues an approval in principle, which is then followed by full licensing upon fulfilment of the final conditions.

How to Start a Digital Bank in ADGM

Launching a digital bank in ADGM requires more than a strong concept. Success depends on regulatory strategy, execution discipline, and early alignment with the FSRA.

Key success factors include:

A credible and sustainable business model

Strong capital backing

Experienced banking leadership

Mature compliance and risk frameworks

Scalable technology architecture

Finjuris supports clients from initial feasibility assessment through to licensing, launch, and post-authorisation compliance.

Get Your ADGM Digital Banking License with Confidence

The ADGM Digital Banking License provides a rare opportunity to set up a fully regulated digital bank in one of the world’s most forward-thinking financial centers. The licensing process is highly demanding and requires careful preparation to obtain a license successfully.

With Finjuris as your strategic partner, achieving clarity, legal compliance, and a roadmap toward a licensed digital bank in Abu Dhabi is now within your grasp.

Speak to Finjuris

If you are considering:

  • An ADGM Digital Banking License
  • A Category 1 banking licence
  • Launching a digital bank in Abu Dhabi

contact Finjuris for a confidential regulatory assessment.

Wish To Know More?

Get your digital banking license in Abu Dhabi with the guidance of Finjuris.

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