New United Arab Emirates central bank rules aimed at cutting lenders’ heavy exposure to state institutions have come into force – but the scale and size of the problem mean it could take years to resolve.
While the directive aims to protect the financial system by reducing local banks’ loans to governments and state-related entities, the latest results from some big banks suggest these credit lines are continuing to expand.
The domestic financial institutions – many of which are themselves owned by government or ruling family members – are now in talks with the central bank over how to comply with the rule changes.
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