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The Central Bank of the UAE, CBUAE, endorses banks’ progressive steps to support customers affected by the COVID-19 pandemic. To date, 77 percent is already drawn-down from the AED 50 billion liquidity facility within the Targeted Economic Support Scheme, TESS, equivalent to AED 38.5 billion of allocated funds.
To incentivise banks and finance companies to draw-down more from the TESS liquidity zero cost funding facility designated to be used by impacted private corporate customers, SMEs and individuals, the CBUAE has also issued a notice that includes additional clarifications on the deferral requests under the TESS and aims to further facilitate the implementation of the scheme.
Pursuant to the notice, all banks and finance companies are required to consider the specific circumstances of impacted borrowers to receive a deferral of repayment within the TESS, as options for granting deferrals include the following: Deferment of principal only, deferment of both interest/profits and principal repayment, or deferment of interest/profits only.
The notice highlighted that the most in-demand option will be for the deferment of both interest/profits and principal repayment, unless the borrower’s circumstances allows for accepting other options.
CBUAE welcomes initiatives taken by banks to support and relieve their impacted customers without drawing against the TESS programme which is available to them.
The CBUAE discloses the list of banks that availed more than 50 per cent of the allocated TESS liquidity facility which aims to protect and support the impacted customers during such unprecedented times The CBUAE also urges banks to draw-drown the allocated funding and support the economy.
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