In accordance with Part Three, Chapter Two, of Union Law No. (10) of 1980 concerning the Central Bank, the Monetary System and Organization of Banking, the Board of Directors of Central Bank of the UAE sets rules to govern ratio requirements to which all banks must adhere to ensure their liquidity and solvency.

In particular, banks must follow a prudent credit policy in order to safeguard the assets entrusted to them.

For the purpose of assessing whether a bank's credit policy, and the exposures arising therefrom, is deemed prudent and, more specifically, whether the risk arising from an excessive concentration of credit to a single borrower or to a group of related borrowers may endanger the solvency of a bank, the Board of Directors of Central Bank of the UAE has resolved to set rules for the monitoring of credit exposure limits of banks operating in the U.A.E. and, as a consequence, has decided to put the following definitions and rules into force.