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Central Bank of UAE monitors banks’ utilisation of Targeted Economic Support Scheme

Central Bank of UAE monitors banks’ utilisation of Targeted Economic Support Scheme : gulfnews.com
  • Banking

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Photo Credit: gulfnews.com


Abu Dhabi: The Cental Bank of UAE (CBUAE) is closely monitoring banks’ utilisation of the Targeted Economic Support Scheme (TESS) programme for the benefit of individuals, small and Medium Enterprises (SMEs) and other private corporates affected by COVID-19 pandemic, the central bank said on Sunday.

The Governor of the Central bank of the UAE (CBUAE) met with CEOs of all banks on April 12, 2020 to discuss the implementation of the TESS.

As part of its ongoing mandate to safeguard consumers, the CBUAE developed detailed regulations and guidelines in relation to the Targeted Economic Support Scheme: Banks are urged to process more applications from individuals, corporates and SMEs whose business operations are affected by the implications of COVID-19 pandemic and banks are expected to retain sound lending standards and are required to treat all their customers fairly.

During the validity of the TESS, which runs up to year end 2020, banks are expected to postpone the payments of interest and/-or principal of loans for customers; Individuals, SMEs and other private sector companies affected by the repercussions of the COVID-19 pandemic.

The TESS includes a liquidity relief tool of Dh50 billion offered by the CBUAE through banks to eligible customers who wish to apply for a deferment. Those eligible customers impacted by the effects of the pandemic will not be required to pay their respective bank any installments, consisting of principal and/or interest/profit, for the agreed deferment period. However, any interest/profit accrued during the deferment period on the principal amount, will be paid by the customer at a later date, to be agreed upon with their respective bank. Banks should not charge any interest/profit on the deferred interest/profit amounts, the CBUAE said in a statement.

The CBUAE has mandated banks to accelerate the account opening time to a maximum of two days for SMEs, unless banks identify the customer as high risk from an anti-money laundering perspective. Additionally, banks shall not be allowed to require their SME customers to have a minimum account balance amounting to over Dh10,000. This measure is aimed at providing banks’ customers with economic relief and to facilitate the continuation of business operations in the UAE.

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Category: #Banking, #Business, #UAE | 2020/04/19 latest update at 8:16 PM
Source : gulfnews.com | Photocredit : gulfnews.com
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