Featured Product

    CBUAE on Targeted Economic Support Scheme Amid COVID-19 Pandemic

    April 23, 2020

    CBUAE developed detailed regulations and guidelines in relation to the Targeted Economic Support Scheme (TESS) in response to the COVID-19 crisis. The Governor of CBUAE met with CEOs of all banks on April 12, 2020 to discuss implementation of the TESS program. CBUAE notified that it is closely monitoring banks’ utilization of the TESS program for the benefit of individuals, small and medium-sized enterprises (SMEs), and other private corporates affected by the pandemic.

    Since the launch of TESS on March 14, 2020, a total amount of AED 10 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. As part of its ongoing mandate to safeguard consumers, CBUAE developed detailed regulations and guidelines in relation to the TESS program:

    • Banks are urged to process more applications from individuals, corporates, and SMEs whose business operations are affected by the implications of COVID-19 pandemic.
    • 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 the 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 program includes a liquidity relief tool of AED 50 billion offered by CBUAE through banks to eligible customers who wish to apply for a deferment. The 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 or 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 or profit on the deferred amounts.
    • 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.
    • Banks shall not be allowed to require their SME customers to have a minimum account balance amounting to over AED 10,000. This measure is aimed at providing banks’ customers with economic relief and to facilitate the continuation of business operations in the UAE.
    • Additional measures taken by CBUAE include the decrease of the minimum required down payment, to increase the affordability of real estate.

    CBUAE confirms the progress in the implementation of TESS by banks and finance companies for the benefit of individuals, SMEs and other private corporates affected by COVID-19 pandemic. CBUAE welcomes banks’ active utilization of allocated funds, which have doubled in a one-week period. CBUAE constantly directs banks and finance companies to implement regulations and guidelines issued within TESS program. 

     

    Related Links

    Keywords: Middle East and Africa, UAE, Banking, COVID-19, Governance, SME, Credit Risk, CBUAE

    Featured Experts
    Related Articles
    News

    US Agencies Finalize Interim Final Rules Issued Amid Pandemic

    US Agencies (FDIC, FED, and OCC) finalized two rules, which are either identical or substantially similar to the interim final rules in effect and issued earlier this year.

    September 29, 2020 WebPage Regulatory News
    News

    EIOPA Consults on Use of Risk Mitigation Techniques Under Solvency II

    EIOPA is consulting on a supervisory statement on the use of risk mitigation techniques by insurance and reinsurance undertakings.

    September 29, 2020 WebPage Regulatory News
    News

    APRA Proposes to Increase Transparency of Banking Data

    APRA announced that it is resuming consultation on the confidentiality of data submitted to APRA by the authorized deposit-taking institutions.

    September 29, 2020 WebPage Regulatory News
    News

    BoE and FCA Encourage Switch to SONIA in Interest Rate Swap Markets

    BoE and FCA are supporting and encouraging liquidity providers in the sterling swaps market to adopt new quoting conventions for inter-dealer trading based on SONIA, instead of LIBOR, from October 27, 2020.

    September 28, 2020 WebPage Regulatory News
    News

    Bundesbank Updates Supporting Information for SHS Reporting

    Deutsche Bundesbank published special schema files for securities holdings statistics (SHS), along with a document on the XML format description.

    September 28, 2020 WebPage Regulatory News
    News

    EC Deems UK Framework for CCPs Temporarily Equivalent to EMIR Rules

    EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).

    September 28, 2020 WebPage Regulatory News
    News

    ESMA to Recognize Three Central Counterparties from UK

    ESMA announced that it will recognize three central counterparties (CCPs) established in the UK as third-country CCPs, from January 01, 2021.

    September 28, 2020 WebPage Regulatory News
    News

    PRA Publishes Version 02.04 of PRA110 Liquidity Metric Monitor Tool

    PRA published Version 02.04 of the PRA110 liquidity metric monitoring tool (PRA110 LMM tool).

    September 28, 2020 WebPage Regulatory News
    News

    LEI ROC Confirmed as Governance Body for OTC Derivatives Identifiers

    FSB confirmed the Regulatory Oversight Committee (ROC) of the Global Legal Entity Identifier System (GLEIS) as the International Governance Body for the globally harmonized identifiers used to track over-the-counter (OTC) derivatives transactions, with effect from October 01, 2020.

    September 25, 2020 WebPage Regulatory News
    News

    FCA Consults on Regulation of International Firms in UK

    FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.

    September 25, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5863