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14 April 2024

Cabinet nod for federal loans

By Staff

The UAE has told its banks not to give loans to federal departments without a prior consent by the cabinet in an apparent move to curb overspending by public establishments and ensure a balanced budget at the end of the fiscal year.

In a circular, the Central Bank told the country’s 23 national banks and 28 foreign units to ensure they obtain prior approval by the federal cabinet before granting loans or overdrafts to federal offices having accounts with those banks.

The circular also asked banks to provide it with details of all accounts held by federal government institutions with two weeks from February 2.

“All banks are asked not to allow federal departments to overdraft on their accounts or give them any loans without a prior cabinet consent,” said the circular, carried by the Sharjah-based Arabic language daily Alkhaleej.