UAE banks di­rected to com­ply with new reg­u­la­tions

The Pak Banker - - Front Page -

DUBAI

Banks in the UAE will be re­quired to com­ply with new cen­tral bank reg­u­la­tions that re­strict their lend­ing to lo­cal gov­ern­ments and gov­ern­ment-re­lated en­ti­ties, cen­tral bank gover­nor Sul­tan Bin Nasser Al Suwaidi said on Tues­day.

The new cen­tral bank lim­its went into force at the end of Septem­ber, and cap lo­cal banks’ lend­ing to gov­ern­ments and gov­ern­ment-re­lated en­ti­ties at 100 per cent of cap­i­tal. The banks’ lend­ing to any sin­gle gov­ern­ment or gov­ern­ment en­tity is lim­ited to 25 per cent of cap­i­tal un­der the rules.

How­ever, two of the largest UAE banks - Na­tional Bank of Abu Dhabi and Emi­rates NBD - re­main in breach of the new lim­its, de­spite the pass­ing of the Septem­ber dead­line.

Al Suwaidi didn’t spec­ify when the UAE banks would be obliged to com­ply with the new guide­lines. “At the end of the day, they [banks] have to com­ply,” he told re­porters, with­out elab­o­rat­ing.

NBAD has said that it se­cured a six month ex­ten­sion to com­ply with the new cen­tral bank rules, giv­ing it un­til the end of March 2013 to bring its lend­ing ra­tios in line.

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