DIFC governor downplays new UAE central bank rules

20 June 2011

Lenders in the UAE fear earnings slowdown after cap for loans

Fears that the new regulations from the UAE Central Bank could cause slowdown among local banks were downplayed by Ahmad Humaid al-Tayer, governor of the DIFC on 21 June.

“I don’t think there is any effect,” he said.

At the end of May, the central bank introduced a cap on the amount UAE banks can lend to consumers at 20 times their salary with a repayment period of 48 months for loans.

Goldman Sachs Group slashed UAE bank earnings by 10 per cent for 2011-14 in a report published on 20 June due to these new measures.

According to Al-Tayer, Dubai’s banking sector is returning to healthy growth, along with “trade, logistics, tourism, the financial sector, import, export, re-export, all these are doing fine”, he said. The real-estate sector is the one struggling the most and “there is no quick solution and it’s not just for the UAE, it’s worldwide”, said Al-Tayer.

Sheikh Ahmed bin Saeed al-Maktoum, chairman of Dubai’s Supreme Fiscal Committee says these core sectors have performed strongly in the first half of this year.

“Dubai is still a busy place, the core business of Dubai is still doing well, with double-digit growth in some sectors for the first half of the year,” he said.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications