Sheikh Zayed bin Sultan Al Nahyan, President of the UAE, tackled the issue by decreeing that banks obtain sufficient guarantees before advancing loans to individuals, and abstain from granting loans to those whose incomes are not sufficient to allow reasonable repayment. The UAE Central Bank also issued a circular confirming that legal liability lies with banks if they do not ensure applicants or sponsors are able to repay loans before advancing them. The circular confirmed that neither police nor courts will act against borrowers if they obtain loans without providing sufficient guarantees. The Central Bank has set a ceiling of Dhs250,000 to limit excessive borrowing. While these restrictions have yet to prove effective, some observers believe that the upward trend may have peaked.
Analysts say the higher number of repayment failure cases have made banks more risk averse.
GCC banks are being compelled, for the first time, to allocate relatively large reserves to cover losses in a sector which is still one of the most profitable among their credit activities. The most comprehensive survey of executive salaries in the region. The latest ranking of the Gulf's best business cities, based on their economic weight and their importance as centres of international business.