Purpose Code (UAE)
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Purpose Code (UAE)
In the context of payments in the UAE, a “Purpose Code” is a specific code that identifies the primary reason for the transaction. The banking system in the UAE requires that all incoming and outgoing payments be classified according to a designated purpose category, such as payment for goods, services, wages, etc.
This requirement is part of regulatory and monitoring efforts to combat money laundering and terrorism financing, as well as for statistical and economic analysis.
Sending payments without a designated purpose code is generally not permitted, as it may lead to delays or rejections of the payment by the bank. Banks in the UAE may request clarification on the purpose of the payment and additional documentation to substantiate the transaction’s purpose before they can process the transfer.