Central Bank Governor Sultan bin Nasser Al Suwaidi said he is not worried about the decision by some Gulf countries to freeze the accounts of those two groups, as he feels the decision "is not part of a trend".
Suwaidi was asked by Emirates Business whether the UAE banks would be told to monitor their loans to other family-run businesses in the UAE.
"No, borrowers are borrowers. Yes, they are families too, but they are also institutions," he said, referring to the two Saudi groups.
"These two borrowers are institutions, they have many companies and they are conglomerates. As a matter of fact, I don't think you can call them families."
He said the Central Bank is dealing with the issue of UAE banks' exposure to these two groups and details would be soon provided. Suwaidi had said earlier that he was not worried about the UAE banks as they are "well-capitalised" and can deal with such problems.
He also played down fears that more regional business families could default.
"I don't take this to be a trend, such things happen. I don't think the issue is default. I think it was decided to freeze the account and was not a default. We don't know the circumstances that led to this freezing, but that is what happened."
Partial restructuring
The Central Bank said yesterday it would restructure some of its sections to upgrade their performance and bring them on par with global standards.
Oliver Wyman, an international management consulting company with offices in the United States and other countries, will offer consultancy services for the restructuring in line with an agreement signed with the Central Bank yesterday.
"Pursuant to this agreement, the company would carry-out comprehensive review of the main functions of the Central Bank and propose amending them in line with international standards and best practices," the Central Bank said.
It said Oliver Wyman would submit reviews and proposals regarding banking supervision, monetary policy, payment systems, anti-money laundering and combating the financing of terrorism, in addition to governance, organisational structure and human resources.
Central Bank Governor Sultan bin Nasser Al Suwaidi signed the agreement with Alexander Lis, Head of Middle East and Africa, Oliver Wyman.
Keep up with the latest business news from the region with the daily Emirates Business 24|7 newsletter. To subscribe to the newsletter, please click here.