United Arab Emirates' central bank said in a circular to local lenders that they do not have to book provisions at the moment for loans to Dubai World [DBWLD.UL], Arabic daily Al Khaleej reported on Friday.
"Banks are not required at the moment to make provisions for loans given to Dubai World," the paper said, adding it will provide banks with direction on how to deal with their debts to Dubai World.
The domestic banking sector has been grappling with the fallout of the global economic crisis and a local property market downturn, as well as the restructuring of Dubai's flagship conglomerate Dubai World.
On March 25, Dubai World unveiled a long-anticipated restructuring proposal, mainly linked to its property units, including Nakheel [NAKHD.UL], to pay roughly $26 billion it owed to creditors.END
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