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

    EC Adopts Financial Reporting Changes Arising from Benchmark Reforms

    EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.

    January 14, 2021 WebPage Regulatory News
    News

    BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk

    BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.

    January 14, 2021 WebPage Regulatory News
    News

    HMT Updates List of Post-Brexit Equivalence Decisions in UK

    HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.

    January 14, 2021 WebPage Regulatory News
    News

    EBA Issues Erratum for Technical Package on Reporting Framework 3.0

    EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.

    January 14, 2021 WebPage Regulatory News
    News

    APRA Publishes FAQ on Measurement of Credit Risk Weighted Assets

    APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.

    January 14, 2021 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for Third Quarter of 2020

    EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.

    January 13, 2021 WebPage Regulatory News
    News

    ECB Analysis Shows Privacy as Biggest Concern in Use of Digital Euro

    ECB concluded the public consultation on the introduction of a digital euro in EU.

    January 13, 2021 WebPage Regulatory News
    News

    ECB Finalizes Guide on Supervisory Approach to Bank Consolidation

    ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.

    January 12, 2021 WebPage Regulatory News
    News

    SRB Chair Outlines Work Priorities for 2021

    The SRB Chair Elke König published an article setting out work priorities for 2021.

    January 11, 2021 WebPage Regulatory News
    News

    FDIC Selects Companies to Compete in Final Phase of Tech Sprint

    FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.

    January 11, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6417