UAE banks need to attract nearly Dh40 billion in new deposits to expand their financial resources to cut rates and bridge a gap between loans and deposits, the Central Bank Governor was quoted on Thursday as saying.
Sultan bin Nasser Al Suwaidi said new provisioning regulations issued by the Central Bank for the country’s 23 national banks and 28 foreign units last week would not curb their lending potential, adding that a floor of 1.5 per cent on provisioning to total loans would have limited effects on the banks on the grounds the new rules gave banks a deadline of four years.
Quoted by the semi-official Arabic language daily Alittihad, Suwaidi said he believes UAE banks would be able to expand credit if they increase client deposits, excluding inter-bank deposits which account for about seven per cent."
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