The Central Bank of the United Arab Emirates has issued Circular No 28 of 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 banksand 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’.
The aggregate amount of specific provisions including interest in suspense should be adequate to absorb estimated credit losses for
individually identified credit exposures.
The Central Bank of the U.A.E. will regularly review the position of individually identified and classified loans and the level of specific and general provisions held by each ins...