Combating coronavirus: UAE Central Bank urges banks to support private sector corporates, SMEs, individuals

The Governor of the Central Bank of the UAE (CBUAE), Abdulhamid Saeed, held his first meeting with CEOs of banks operating in the country to emphasise the systemic significance of extending support to private sector companies and individuals affected by Covid-19 as part of the Targeted Economic Support Scheme (TESS).
The meeting comes as part of its ongoing mandate to safeguard financial stability in the UAE.

At the meeting, the banks' CEOs endorsed the exceptional measures taken by the CBUAE in a very short time span and welcomed the efforts of the Central Bank of the UAE to support the banking sector and the national economy from the impact of the spread of Covid-19 and expressed their willingness to participate in the TESS.
In addition, banks' CEOs confirmed to the CBUAE their decision to avail the benefits of TESS.
The Governor hosted an in-depth discussion of the measures implemented under the TESS and stressed the importance of banks' steadfast commitment to making active use of the TESS and utilising the Scheme to the full extent, for the benefit of corporates, individuals and the economy in general.

A number of Chief Executive Officers of banks shared the progress of their utilization of TESS till date and their targeted outreach programme to support their affected customers by Covid-19; including individuals, private corporate customers, and Micro, Small and Medium Enterprises (MSME's).

Since the launch of the TESS on 14 March 2020, a total amount of AED10 billion has been provided to banks in the form of zero interest funding, and over AED 61 billion in the form of lowered cash reserve requirements, which are to be deployed to directly benefit companies and consumers who have been adversely impacted by the pandemic.

The Central Bank encourages all Boards and Management of Banks to accelerate their confirmation to implement TESS measures as soon as possible.

From our side, CBUAE will be reaching out to the banks during the coming days to better understand how they plan to serve the objectives of TESS and help their customers to cope with the consequences of Covid-19 pandemic.

The Governor underlined that the breadth and depth of banks' participation in the Scheme will be a fundamental factor in its success.

He added: "It is encouraging to see that banks operating in the UAE are drawing upon the Targeted Economic Support Scheme to support the liquidity needs of their customers, as we aim to cushion the economic impact of the pandemic on companies as well as individuals. I am confident that the Scheme will act as a catalyst to strengthen economic activity and effectively mitigate financial risk, while also ensuring that the businesses are prepared for the post-COVID-19 era. In addition, I would like to thank participating banks for their collaboration and positive response to support their affected customers at their unprecedented time".

Saeed noted: "We urge banks and financial institutions to act in the best interest of retail clients, private sector corporates and SMEs, which are the growth engine of our economy."

Banks which have yet to confirm their participation in the TESS are called upon to do so at the earliest, to protect our economy.