UAE banks directed to comply with new regulations
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.