A circular released by the UAE Central Bank earlier this month amending large exposure limit rules and introducing caps on loans to local governments and their related entities, has thrown some of the federation’s commercial banks into confusion and caused one potential bank issuer to call off a roadshow planned for last week.
The new regulations prevent banks from lending more than 100% of their capital to the federation’s governments and government-related commercial and non-commercial entities.
“Where there is an excess,” the circular read, “banks should make arrangements to regularize their position no later than September 30 2012.”
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