• Home
• /
• Business

CB warns against excess IPO financing

ABU DHABI — The Board of Directors of Central Bank of the UAE which met here yesterday has taken serious notice of the gross violations committed by certain commercial banks who flouted the restrictions imposed on loaning out to finance the Initial Public Offering (IPOs) in clear violation of its earlier circular.

The Board directed the Central Bank management to prepare a report to identify banks who did not adhere to Central Bank regulation, in order to take the necessary action against such banks, to protect public interest

The board reiterated the need for banks to comply with circuler no 25 of 2005, concerning loans extended to finance the purchase of company shares.

The board of directors of the Central Bank of the UAE met under the chairmanship of Mohammed Eid Al Meraikhi, Chairman of the Board and attended by Juma Al Majid, Deputy Chairman, Sultan bin Nasser Al Suwaidi, the Governor. Others who attended the meeting included Jamal Nasser Lootah, Khalifa Nasser bin Huwaileel, Ali Al Sayed Abdulla, Saeed Rashid Al-Yateem Al-Muhairi, and Mohamed Ali bin Zayed Al Falasi.

The board reviewed reports concerning the extent of compliance of banks and other financial institutions with Central Bank regulations.

A report was presented to the board regarding the performance of banks during the first quarter of 2005, which showed good growth in net profits as well as assets.

The board also reviewed the application submitted by banks and moneychangers operating in the UAE, to expand their business and to open new branches.

The board approved the applications which fulfull the terms as per the law, and regulations as applied to each business activity.