Central Bank UAE to Tighten Provisions?

Emirates Business reports that the CB UAE will soon issue regulations tightening loan provisioning in the UAE:

1. Non Performing Loans:  Changing the definition so that loans past due 90 days or more will be classified as non performing.  The current standard is 180 days.  In most jurisdictions it is 90.  This initiative was reported in November.  Earlier post here.  It's important to note that most of the UAE's banks seem to be using a 90 day rule already.
   
2. Mandatory Provisions:  Requiring banks to hold a general provision between 1.25% and 2.0% of their outstanding loans.  While not state presumably the provision level will be scaled by type of asset, e.g., consumer loan, credit card, commercial loan, etc.

The effect of these moves will be to strengthen the banking sector's ability to withstand a hit on an aggregate basis.  As history shows, however, regulations are not a bar to unwise underwriting and business decisions.  And if there is one group who suffer from hereditary ADD, it is bankers.