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Sunday, 14 November 2010

U.A.E. Central Bank Requires Lenders to Book Provisions Every Quarter - Bloomberg

The United Arab Emirates’ central bank is seeking to improve transparency in the banking industry by requiring lenders to book provisions every three months instead of waiting until the end of the year to cover bad loans.

The new guidelines, which classify loans and provisions in line with the Basel Committee on Banking Supervision standards, will “serve as a catalyst in depicting a truly realistic financial position of banks and other financial institutions,” a statement on the central bank’s website said.

“All banks and other financial institutions are required to make provisions, specific or general, required for this regulation and deduct them from the profit and loss account at the end of each quarter and not delay them till the end of the financial year,” the statement dated Nov. 11 said.