Monday, Feb 28, 2011

Gulf News

Freeze on Gaddafi assets based on foreign ministry order

Abu Dhabi The UAE will comply with the United Nations Security Councils resolution that calls for freezing the foreign assets of Libyas leader Muammar Gaddafi, UAE Central Bank Governor Sultan Nasser Al Suwaidi said here yesterday.

We would comply with any UN resolution on Libya, he told reporters at a press conference. Freezing of assets by banks will be based on an official order coming through the Ministry of Foreign Affairs, he added.

The Security Council late on Saturday voted 15-0 to freeze the foreign assets of Gaddafi and four aides and to bar them from travelling, in the broadest international effort to halt his regimes attacks on demonstrators. The vote followed a plea by Libyan Ambassador Mohammad Shalgham on February 25 for the UN to save his nation.

As well, Al Suwaidi dismissed rumours of money transfers to the UAE from Egypt and Tunisia following the fall of their regimes.

In Egypt, the banks were closed and nothing has been received. With Tunisia, we dont have a strong banking relationship, Al Suwaidi said. He said because there are businesses in the country, outward remittances of money from the UAE are normal.

But you should be able to differentiate between suspicious remittances and normal remittances, Al Suwaidi added. He said the next activity that will regulated in the country will be housing loans and real estate loans. That is coming very soon... this year, within months, he added.

Separately, Al Suwaidi said distribution of dividend by banks should not exceed 50 per cent of their 2010 profit as per the auditors statement.

He said that the establishment of the Credit Bureau, which will track the credit history of individuals, is in the final stage.

Similar performance

He said special regulations on provisioning identify the criteria to classify bank loans into five categories. These regulations are in line with international best practices.

As long as banks need to put aside provisions, they will have to abide. If we are not happy with provisions, we dont approve annual accounts, Al Suwaidi said.

Asked about the loan growth outlook for the UAE banks in 2011, Al Suwaidi said: The outlook is fine. I think, we will be fine. He said the banks performance this year is expected to be similar to their 2010 performance.

Ill be happy to see 85 per cent loan to deposit ratio in the UAE banking system, said Al Suwaidi. He ruled out an increase in interest rates in the UAE, near-term.

Low inflation

The interest rate on the US dollar is low and the dirham is pegged to the dollar. The inflation is also low. Unless theres an increase in the US..., he said.

Bankers said the new rules represented broad guidelines.

The idea is to not only bring about uniformity in lending but also to control personal loans that were liberally given by banks, said an Abu Dhabi-based banker. Uniform charges will be viewed positively by customers, he added.

The UAE government also approved an increase in the capital of the Gulf Arab countrys central bank, WAM news agency reported yesterday.

By Himendra mohan Kumar, Staff Reporter

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