UAE Central Bank says lenders have used 60% of Covid-19 support fund

The regulator says utilisation has doubled within a week and equates to Dh30bn of the Dh50bn allocation

ABU DHABI, UNITED ARAB EMIRATES - May 20, 2009: The front lobby of the Central Bank of the United Arab Emirates. 
( Ryan Carter / The National ) *** Local Caption ***  RC026-CentralBank.jpgRC026-CentralBank.jpgRC026-CentralBank.jpg
Beta V.1.0 - Powered by automated translation

UAE lenders have tapped 60 per cent of a Dh50bn Targeted Economic Support Scheme (Tess) facility to help businesses and individuals through the Covid-19 outbreak, the Central Bank of the UAE said on Thursday.

The regulator said it “welcomes banks’ active utilisation of allocated funds”, which equates to Dh30bn and has doubled within a week, as lenders look to support customers affected by the Covid-19 pandemic.

“In our efforts to protect impacted individuals and ensure continuous operations of private corporates and SMEs (small-and-medium sized businesses), the CBUAE constantly directs banks and finance companies to implement regulations and guidelines issued within the Tess programme,” the central bank said. "This will ensure banks’ effective, full utilisation and swift response for the benefit of the affected customers.”

The support scheme was announced as a Dh100bn package on March 14, which included a direct Dh50bn injection of funds through zero cost collateralised loans provided by the central bank, plus a relaxation of banks' capital buffers allowing them to increase lending by another Dh50bn.

Further easing of restrictions on capital and liquidity reserves subsequently increased the overall size of the stimulus to Dh256bn.

The central bank ordered lenders to remove requirements for SMEs businesses to have a minimum account balance of Dh10,000 before opening accounts.

It also urged lenders to speed up the length of time it took to open accounts to no longer than two days – unless potential customers were deemed to be high-risk under anti money-laundering rules.

NEWSLETTERS
MORE FROM THE NATIONAL