Combating coronavirus: UAE banks obtain Dh10b at zero interest from Central Bank

The UAE Central Bank on Monday said that Dh71 billion has been provided to local banks in the form of zero interest funding and lowered cash reserve requirements to combat with the impact of coronavirus.

Under the Targeted Economic Support Scheme (Tess) announced on March 14, Dh10 billion has been given to banks in the form of zero interest funding and Dh61 billion to support cash reserve requirements.

A total of Dh50 billion funds were made available by the regulator to local banks under Tess at zero cost to extend finance to individuals and SMEs.

The regulator urged banks to support private sector corporates, small and medium businesses and individuals to mitigate the effects of Covid-19

The regulator asked those banks who have not yet confirmed their participation in the Tess to do it at the earliest to safeguard the businesses and economy against the impact of coronavirus.

"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 who have yet to confirm their participation in the Tess are called upon to do so at the earliest, to protect our economy," Abdulhamid Saeed, governor of the Central Bank.

The Central Bank earlier this month doubled the size of its stimulus package to Dh256 billion in order to support banks with liquidity and help businesses and individuals through different measures.

Abdulhamid Saeed, governor of the Central Bank, held a meeting with the senior officials local banks and encouraged them to accelerate their confirmation to implement stimulus measures as soon as possible.

The Central Bank will also 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.

"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," said Abdulhamid Saeed.

-waheedabbas@khaleejtimes.com