CBUAE on Targeted Economic Support Scheme Amid COVID-19 Pandemic
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
- Press Release on Regulations and Guidelines in relation to TESS (PDF)
- Press Release on Progress in Implementation of TESS (PDF)
- Press Release on Meeting on Implementation of TESS (PDF)
Keywords: Middle East and Africa, UAE, Banking, COVID-19, Governance, SME, Credit Risk, CBUAE
Featured Experts

Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous Article
ESAs Propose Regulatory Standards on ESG DisclosuresRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.