Stricter scrutiny of the creditworthiness of prospective loan-takers is in the offing by UAE banks, with the period of indiscriminate lending being brought to a close by the global credit crunch.

Emirates Business has learnt that despite a large number of promotional e-mails and text messages being sent by banks to attract people to take loans, at least two major UAE banks have decided to be more choosy about who they lend money to.

Saif A Al Shehhi, Senior General Manager for domestic banking at National Bank of Abu Dhabi (NBAD), said: "Banks will now be expected to act more prudently when it comes to lending."

His comments came in response to the fact that despite the turmoil in international financial markets, people from different income levels in the UAE are still receiving text messages on their mobile phones to "hurry for attractive offers on personal loans".

This is also at a time when the UAE Central Bank has approved the injection of Dh50 billion into the banking sector apart from the Ministry of Finance's announcement of adding another Dh70bn in liquidity.

"We were fine, but we know some banks have had a liquidity problem and the government's intervention was to protect customers and preserve the credibility of the banking sector in the UAE," said Al Shehhi.

"We know there will be amendments and changes by the new year regarding personal loans and loans to finance big projects, aimed at protecting all parties involved," he said.

Those changes, he added, would mean that banks would carefully study how capable a customer is of repaying his loan before approving it.

Al Shehhi said the percentage of personal loans is small compared to corporate loans that companies owe banks on their projects. "But it all adds up," he said.

Jamal bin Ghalita, General Manager for consumer banking and wealth management at Emirates NBD, said consumers were expected to use their wisdom and good sense before thinking of applying for a personal loan.

He said: "If banks reduce lending, the economy will slow down and so growth may decline even if it still remains positive. At the end of the day, banking is the oxygen of the economy."

He said the promotional messages might have been sent by banks to keep a steady customer base in such "different financial times".