UAE banks urged to reduce lending rates
Dubai, May 30, 2011
Banks in the United Arab Emirates should bring down interest rates on loans as much as possible since they are awash with liquidity, a daily on Monday quoted the country's central bank governor as saying.
Bank deposits in the world's No.3 oil exporter rose in March to their highest level in at least more than two years as depositors stored money in banks due to social unrest in the region. However, UAE banks remain hesitant to lend following Dubai's debt woes and weakness in the property sector.
'Those borrowers, especially merchants and businessmen, are complaining about high interest margins on their banking facilities,' Sultan Nasser Al-Suweidi told heads of UAE banks, according to daily Khaleej Times.
'The key question is that banks change terms of their banking facilities in agreements ... and of course, as you know that borrowing is the basis for growth and prosperity of the banking business, therefore, I would urge you to reduce interest rate margins on loans,' he told bankers on Sunday.
Deposits in the country's banking system stood at 1.105 trillion dirhams ($301 billion) in March, up 5.3 percent since the turmoil in the Arab world started in December, central bank data showed.
However, UAE private sector credit was up only 2.0 percent year-on-year in February, a second monthly rise in a row following at least 13 consecutive months of declines. It showed annual growth rates of above 50 percent at the height of the oil and property boom in 2008. - Reuters
More Finance & Capital Market Stories
- Emaar proposes 15pc cash dividends
- ABG units win top Islamic finance award
- Finance House approves 25pc cash dividends
- Qatar 'most expensive country in Gulf'
- Egypt regulator sets rules for index
- Dubai Islamic eyes Kenya, Indonesia for expansion
- ADCB to buy back 3pc of its shares
- GCC insurance growth outpaces developed markets
- Bahrain 'faces budget deficit, inflation challenges'
- Global Payment Services wins key certification
- BBK unveils big India expansion plans
- Kuwait GDP growth to hit 3.5pc in 2014
- Gulf shares tumble over EM exposure cut
- GCC bonds to gain from macro-economic climate
- French Business Council Dubai members up 18pc
- Egypt economy growth seen less strong than thought
- Sharjah approves $4.2bn budget for 2014
- Saudi non-oil sector posts solid growth in Feb
- Seera total income rises to $34m
- NBAD approves 40pc cash dividends
- NBAD sees 8-10pc loan growth
- Al Basel Group launches investment arm
- Union Insurance posts $18m profit
- Oman warns banks on conflicts of interest
- Japan to lend Tunisia $480m
- 400 to join anti-laundering seminar in Riyadh
- Lebanese insurer to head Prague Club
- UAE's first REIT plans $135m IPO
- Bahrain banking industry outlook 'positive'
- New India Assurance opens Bahrain branch