The Central Bank of the United Arab Emirates has issued Circular No 28/2010 regarding loan classification and provisioning on 11 November 2010. The circular provides that the Banking Supervision and Examination Department will issue a manual to clarify how banks and financial institution should apply the terms of the above mentioned circular. In addition, we have received correspondence from a number of banks outlining various implementation issues and seeking further clarification.

In this context we are providing this manual to assist banks in applying the requirements of Circular No 28/2010 ‘Regulation for the Classification of Loans and their Provisions’.