The new regulations will come into force on December 30, 2021.
On December 20, Monday, the Central Bank of the UAE announced that it plans to introduce new and improved rules of supervision and regulation for banks providing their financial instruments for the real estate market.
These regulations will come into force on December 30 – they must control both financial resources held by banks, such as loans and investments, and off-balance sheet assets and liabilities.
The Central Bank of the United Arab Emirates has paid particular attention to clarifying the regulations, accounting criteria, supervision of banks' finances, assets, and liabilities.
The new standards oblige banks to review and improve their internal policies on underwriting, evaluation, and risk management.
The Central Bank is guided by the fact that many banks have high-risk assets and liabilities on their accounts. International experience and the experience of the 2008-09 crisis have shown how catastrophic the consequences of insufficient supervision of banks with such risks can be.
The first year, from December 2021 to December 2022, is observational. This year, banks will have time to adjust their policies and assets to the requirements. The effectiveness of the new long-term regulations will also be evaluated.
Only in 2023, the regulations will either enter into force as they are or will be revised in the light of practical experience.
