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

    Related Articles
    News

    HKMA Consults on Supervisory Policy for OTC Derivatives Transactions

    HKMA is consulting on revisions to the Supervisory Policy Manual module CR-G-14 on margin and other risk mitigation standards for non-centrally cleared over-the-counter (OTC) derivatives transactions.

    May 25, 2020 WebPage Regulatory News
    News

    PRA on Regulatory Capital and IFRS 9 Requirements for Payment Holidays

    PRA provided further information on the application of regulatory capital and IFRS 9 requirements to payment holidays granted or extended to address the challenges arising from COVID-19 outbreak.

    May 22, 2020 WebPage Regulatory News
    News

    HKMA on Fintech Adoption and Innovation by Banks in Hong Kong

    HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.

    May 20, 2020 WebPage Regulatory News
    News

    BIS on Impact of Increasing Use of Cloud Technology on Cyber Risk

    BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.

    May 20, 2020 WebPage Regulatory News
    News

    ECB Consults on Guide for Managing Climate and Environmental Risks

    ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.

    May 20, 2020 WebPage Regulatory News
    News

    ECB Issues Opinion on Revisions to CRR in Response to COVID Crisis

    ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.

    May 20, 2020 WebPage Regulatory News
    News

    EBA Assesses Interlinkages Between Recovery and Resolution Planning

    EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).

    May 20, 2020 WebPage Regulatory News
    News

    SRB Publishes Final MREL Policy Under the Banking Package

    SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.

    May 20, 2020 WebPage Regulatory News
    News

    US Agencies Amend Interim Final Rule on Transition Period for CECL

    US Agencies (FDIC, FED, and OCC) published a final rule that makes technical changes to the March 31, 2020 interim final rule that provides a five-year transition period for the impact of the current expected credit loss (CECL) methodology on regulatory capital.

    May 19, 2020 WebPage Regulatory News
    News

    ECB Releases Results of March Survey on Credit Terms and Conditions

    ECB published results of the March 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets.

    May 19, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5208