Regulatory Alerts1986-09-30
UAE Central Bank Circular No 394: Advances to Deposits Ratio
The United Arab Emirates Central Bank issued Circular No 394 to amend the advances to deposits ratio regulation, requiring all local and foreign banks to maintain a maximum ratio of 1:1 between specified assets and stable resources. The directive defines numerator components as loans, advances, and interbank placements over three months, while denominator components include free own funds, interbank deposits over six months, and stable customer deposits. Banks must comply with this liquidity measure on a domestic basis, with local banks having foreign branches also required to adhere to the rule on a worldwide consolidated basis, subject to potential reserve requirements for non-compliance.
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