The Central Bank working on new rules...

The Central Bank working on new rules…

UAE central bank won't impose without consultation

The central bank is working on new rules for the property mortgage industry.

January 21, 2013 10:07 by Reuters

The United Arab Emirates central bank will not impose limits on mortgage lending without consulting commercial banks, and any new rules are not imminent, central bank governor Sultan Nasser al-Suweidi was quoted as saying.

The central bank is working on new rules for the property mortgage industry but they will take at least six to nine months to emerge, Monday’s Al Ittihad newspaper quoted Suweidi as saying in an interview.

A circular sent to commercial banks by the central bank last month, and seen by Reuters, said mortgage loans for foreign individuals should not exceed 50 percent of the property value for a first purchase of a home, and 40 percent for second and subsequent homes. Caps for UAE citizens were set at 70 percent for a first home and 60 percent for subsequent ones.

But Suweidi was quoted as saying by Al Ittihad on Monday that there was a “misunderstanding” in the media and that no central bank ruling had been issued, only a warning to banks to be prepared for rule changes in the future.

Suweidi’s office told Reuters that he was not immediately available to comment.