UAE banks can currently lend as much as 20% of customer deposits to the property industry
The United Arab Emirates’ central bank is working on new rules that will loosen the cap on bank lending to the struggling real-estate industry.
UAE banks can currently lend as much as 20% of customer deposits to the property industry. That will be raised to a still-undecided figure but lenders that exceed 20% would incur a capital charge, central bank Governor Mubarak Rashed Al Mansoori said in Abu Dhabi on Sunday.
“We need to be flexible,” Al Mansoori said at a conference. But banks would “need to assess the risk-return profile of this investment. Is it worthwhile, do I want more capital?”
Banks in the second-biggest Arab economy have called on policy makers to loosen the limit amid a property slump that has affected lending.
Al Mansoori also said: