Commercial bank executives in the United Arab Emirates will meet central bank officials later on Tuesday to discuss a deadline for obeying new limits on lending to state-linked firms, with the lenders desperate for information after weeks of silence from the regulator.
With under a week until the curbs are due to take effect, banks in the UAE are in the dark over whether the rules will be enforced or if their pleas for more time have been heard. "Bank chiefs will meet the central bank today and there will be lots of ranting and raving about this Sept. 30 deadline," said a senior commercial banker who is aware of the meeting, declining to be named because of the sensitivity of the issue.
The rules, announced in an early April circular to commercial banks, are apparently designed to prevent any future repeat of Dubai's corporate debt crisis, which erupted in 2009 as the real estate market crashed; the crisis was worsened by local banks' excessive exposure to state firms.
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