Skip to main content
Entire section Custom print Text Only Rich Text Print

Article (12) Liquidity Requirements

C 112/2018 Effective from 24/4/2018
  1. 12.1 The following items may be considered as Liquid Assets:
     
    1. Cash held in a U.A.E. Bank;
       
    2. Certificates of deposit issued by the Central Bank held via a U.A.E. Bank;
       
    3. Short-term deposits with a U.A.E. Bank with maturity up to 30 days; and
       
    4. UAE Federal and local government bonds, which must not exceed 30% of the total amount of Liquid Assets.
       

    Encumbered cash held as collateral by a Finance Company is not considered as Liquid Assets.

  2. 12.2 To withstand short-term liquidity stress, Finance Companies are required to hold an amount equivalent to 10% of their Aggregate Liabilities in Liquid Assets. A Finance Company may, for the purpose of this calculation, deduct from Aggregate Liabilities any of the following items:
     
    1. Cash collaterals;
       
    2. Bank guarantees from U.A.E. Banks; and
       
    3. Sovereign guarantees.
       

    The items listed under the letters a, b and c of this Article must be legally enforceable.

    12.3 Consistent with Article 12.2 of this Regulation a Finance Company must not hold more than 25% of its Liquid Assets in a single U.A.E. Bank.

  3. 12.4 Customer deposits of a Finance Company are not subject to cash reserve requirements.