The Emirates Bankers Association’s Retail Lending Committee formulated and today is circulating guidelines to member banks in the UAE that it hopes would set a new mode of operation relating to mortgage loans, according to a banker who did not wish to be named.
The new approach is seen as the response by UAE banks to the UAE Central Bank’s new rule on mortgage caps, which, if applied, would significantly lower the amount of capital a bank can loan for property buyers in the UAE.
The bankers met on last Sunday and agreed to ask the Central Bank if the new mortgage cap ratios could be postponed one month, and until they could formulate a code of conduct. This code of conduct or guidelines would buffer risks on loan defaults and make it more difficult for speculators to artificially inflate property prices.
Modus Operandi proposed by bankers | GulfNews.com
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