Abu Dhabi: The Board of Directors of Central Bank of the UAE has set rules for the monitoring of credit exposure limits of banks operating in the UAE.
Exposures to banks operating outside the UAE, irrespective of their maturity, are not allowed to exceed 30 per cent of the bank’s capital base. The same applies to exposures of branches of foreign banks to their head offices and other branches abroad, as well as to foreign subsidiaries and affiliates of such head offices; this limit also applies to exposures of UAE incorporated banks vis-a-vis their foreign subsidiaries and affiliates.
Banks that have exposures that are out of line with the new limits must improve such exposures at the rate of 20 per cent per annum. Full compliance with the limits must be achieved in five years. Banks are required to take appropriate measures to comply with the limits as soon as possible and in any event not later than the end of the quarter following the over-limit situation.
