Wednesday, Feb 06, 2013
DUBAI (Zawya Dow Jones)--The United Arab Emirates' main banking industry group has asked the central bank to ease restrictions on mortgage lending it introduced in a recent circular.
The Emirates Banks Association is suggesting a 75% loan-to-value cap on borrowing for expatriates and an 80% cap for U.A.E. citizens after taking a survey of members, it said in an emailed statement Wednesday. The central bank had outlined a 50% cap for expatriates and 70% for locals in a December circular.
The EBA survey, which was submitted to the central bank on Monday, also showed banks wanted a total financing cap of seven years' salary for expatriates and eight years' salary for nationals, it said. The banks are suggesting a maximum repayment period of 25 years.
The EBA has become more active in recent months as banks push back against recent central bank restrictions on lending. The regulator last year introduced a cap on lending to local governments and government-connected companies, but those limits were postponed in December following consultation with banks that are heavily exposed to state-owned enterprises.
In its statement Wednesday, the EBA said it was continuing to cooperate with the central bank "to protect the borrowers, the banking sector and the national economy."
Write to Asa Fitch at asa.fitch@dowjones.com
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(END) Dow Jones Newswires
06-02-13 0803GMT
