The United Arab Emirates' central bank will probably have to grant extensions to a September deadline for imposing a cap on bank lending to sovereign and government-related entities as some lenders will be unable to
make the adjustments in time.
The new rules, announced last month, mark the first such regulatory change in nearly two decades and have caused waves in the UAE banking sector, notably at the country's two biggest banks - Dubai's Emirates NBD (ENBD) and National Bank of Abu Dhabi (NBAD).
Lending to governments of the seven-member UAE federation and their non-commercial entities will be capped at 100 percent of a bank's capital base and at 25 percent for lending to
individual borrowers. There is no limit at present.
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