UAE – Mubasher: The Central Bank of the UAE (CBUAE) has adopted a comprehensive economic support plan worth AED 100 billion to tackle the consequences of the coronavirus (COVID-19) pandemic, according to the Emirates News Agency (WAM).
The economic support plan aims to facilitate the provision of temporary relief from the payments of principal and interest on outstanding loans for all affected private sector companies and retail customers in the UAE for a period of up to 6 months, as disclosed by the CBUAE in a recent statement.
As part of the economic plan, AED 50 billion will be allocated from the CBUAE funds to grant all the UAE’s banks collateralised loans at zero cost.
Meanwhile, AED 50 billion will be freed up from banks’ capital buffers.
"The UAE banking system is adequately capitalized and banks maintain significant voluntary capital buffers in addition to the minimum prudential requirements. The draw-down of those voluntary buffers is not considered for the purposes of calculating the overall size of the targeted economic support scheme," the CBUAE referred.
At the same time, the amount of capital that banks have to hold for their loans will be decreased by 15-25% to enable small-and-medium-sized enterprises (SMEs) to have access to funds.
