Bahrain proposes mortgage curbs

by Daliah Merzaban Tuesday, 11 December 2007

Bahrain's central bank said on Monday it wants to limit banks' exposure to the real estate market and proposed capping the value of the mortgages they can offer at 25% of total loans.

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Banks would be able to finance up to 70% of the value of a property if the proposal is approved, the central bank said in a consultation paper posted on its Web site. It did not say whether there were limits now.
"Limits are aimed at promoting best practice in banks' exposure to real estate and the avoidance of over-concentration by banks in real estate exposure," the central bank said.

"There will be an aggregate credit concentration limit for real estate financing to individuals, corporations and contractors of 25% of the bank's gross loan portfolio," it said.

Bahrain's central bank is asking lenders to submit comments on its proposals by January 31. (Reuters)



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