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Article 6: Credit Exposure Restrictions

C 21/2022 Effective from 1/10/2022
  1. 6.1 A Specialized Bank’s Credit Exposure to a single borrower or group of Related Entities is considered as a Large Credit Exposure, where its value is equal to or exceeds 5% of the Specialized Bank’s Aggregate Capital Funds. For the purpose of calculating the value of a Large Credit Exposure, a Specialized Bank may consider whether to deduct any of the following items:
     
    1. 6.1.1 Provisions;
       
    2. 6.1.2 Cash collaterals;
       
    3. 6.1.3 Bank guarantees from UAE Banks; and
       
    4. 6.1.4 Sovereign guarantees.
       

    Items 2, 3, and 4 listed above must be legally enforceable.

  2. 6.2 The aggregate amount of Large Credit Exposures must not exceed 100% of the Aggregate Capital Funds of a Specialized Bank.
     
  3. 6.3 In addition to Article 6.2, the Central Bank has defined maximum permissible Credit Exposure limits, as shown in Table 1 below.
     
     
    BorrowerAggregate percentage of Aggregate Capital FundsIndividual percentage of Aggregated Capital Funds
    A single borrowerNot applicable10%
    A group of Related EntitiesNot applicable15%
    Principal Shareholders and their Related EntitiesNot allowedNot allowed
    Subsidiaries and Affiliates20%10%
    Board membersNot allowedNot allowed
    Employees2%20 times salary
    External auditors, consultants and lawyersNot allowedNot allowed