Media ININ Economy We Trust
Abu Dhabi 24-10-2019
The Central Bank of the United Arab Emirates has issued to the banks operating in the UAE a draft regulatory framework for banks’ exposure to the real estate sector for consultation.
This framework has been prepared in line with the Central Bank’s ongoing efforts to develop its regulatory systems in conjunction with a comprehensive assessment of the situation and third-party validation by external international experts.
The “proposed regulatory framework” aims primarily to enhance financial stability by reformulating regulatory measures aimed at banks’ exposure to the real estate sector.
These improved measures are expected to allow more flexibility in lending to the real estate sector, while emphasizing that banks with high exposure to the real estate sector beyond the prescribed limit will be subject to additional regulatory requirements.
In addition, by imposing an irreversible backstop, the proposed measures will help to avoid excessive exposure to the real estate sector and encourage banks to maintain diversified assets.
The UAE Central Bank seeks to complement the proposed framework with its risk-based supervision methodology to ensure consistent and consistent application of regulatory measures and appropriate risk management standards across all banking institutions.
The bank called on banks to provide feedback on the proposed framework through the Emirates Banks Union by 31 October 2019.
