Realty lending to remain within policy

Bank lending to the real estate sector will remain within the policy formula set by the UAE Central Bank, although the legal restriction to lend to the sector not exceeding 20 per cent of the total deposits was cancelled last month, said Abdul Aziz Al Ghurair, Chairman of the UAE Banks Federation.

“While the legal restriction on lending to the real estate sector is removed, we expect the central bank to regulate the total exposure from time to time depending on the market conditions. The central bank now has more flexibility in deciding on lending to this important segment of the economy,” said Al Ghurair. He said the current rules governing loan to value ratios are likely to remain unchanged in the near term.