Dubai: The banking sector regulation in the UAE crossed a number of landmarks this year with new central bank initiatives and efforts from within the industry to introduce self regulation.
The central bank initiated a number of regulatory initiatives this year to protect the asset quality and balance sheet strength of the UAE banks. “The health of the financial sector is our priority in introducing new regulations. The recent initiatives such as the mortgage regulations and lending restrictions based on exposure limits are a few of such initiatives,” said Sultan Nasser Al Suwaidi, the Governor of the UAE Central Bank.
The central bank recently granted a five-year time frame to UAE banks to reduce their excess balance sheet exposure to government related entities (GREs). Banks are now allowed to reduce excess lending to state entities by 20 per cent per annum until they reach the exposure ceiling set by the central bank.
Mortgage regulations
In the face of the increased focus on asset quality and transparency, the UAE banks are preparing themselves for more self regulation.
“The UAE Central Bank has issued the mortgage regulations, in a few months from now we will have the credit bureau in operation. These new regulatory efforts are aimed at making the banking sector more transparent and customer friendly. The UAE Banks Federation will work towards more self regulation and work closely with the regulator,” said Abdul Aziz Al Ghurair, Chairman of the UAE Banks Federation (UBF).
Earlier this month UBF, the representative body of 51 banks operating in the country adopted a code of conduct for all its members. The code aims to raise the professional standards of banking practice and to promote greater trust in the UAE banking industry.
