ABU DHABI: The UAE central bank has told banks they may be allowed to exclude bonds issued by state-linked entities from planned lending limits slated to take effect later this year, a local newspaper said yesterday, citing bankers.

In April, the central bank expanded its large-exposure limit rules for commercial banks, introducing new caps for loans made to local governments and their entities.

The ruling would cap lending at 100 per cent of a bank's capital base to governments of the seven-member UAE federation and their non-commercial entities, and 25pc to individual borrowers.

Arabic language daily Al Khaleej said the central bank has notified banks on an informal basis that "in principle it does not oppose excluding bonds issued by government companies subscribed to by the banks from the permitted credit ratio."