The Debt Panel: ‘My bank rejected my payment relief request, saying TESS had ended’

The Dubai resident has been placed on leave without pay for three months and has no source of income to keep up with instalments

Mathew Kurian / The National
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I have a personal loan with one of the banks in the UAE. For the past three years, I have paid my monthly loan instalment of Dh2,685 on time without any issues. The original loan was for Dh110,000 over a period of four years and the outstanding balance is now about Dh31,000.

As we know, many lives have been devastated by the Covid-19 pandemic, including that of my family. From July 1, my company placed me on leave without pay and this will last for three months.

Because of this, I requested a payment holiday on my loan for three months with my bank. However, the bank denied my request, saying that the Central Bank of the UAE’s Targeted Economic Support Scheme (TESS) had ended and I had to continue paying my loan every month.

I don't have any source of income and my family’s finances have been severely disrupted. We are surviving with the help of family and our savings. But I have been unable to pay my loan since July and the bank has now issued me with a legal notice.

Do I have the right to claim the TESS relief package from my bank, or, as they say, has the TESS programme ended now? I have a wife and two children to support and I don't know what to do. RS, Dubai

Debt panelist 1: R Sivaram, executive vice president, head of retail banking products, Emirates NBD

This is a very challenging time and I sympathise with the immense pressure of your situation.

As you have paid back a substantial portion of your original loan, this definitely relieves you of a major part of the debt burden.

I would recommend that you closely assess your disposable income as well as any personal assets you might be able to liquidate to raise funds immediately, so that you can fulfil your ongoing financial commitments and prevent it from increasing further.

Although your bank is not offering the three-month payment holiday, you can still negotiate with them and request to have your loan terms restructured.

I would also suggest you speak to the concerned department at your bank to inform them that you are committed to clearing your dues, and request for an additional moratorium along with a repayment plan.

The TESS programme extended by the Central Bank of the UAE helps banks to provide relief to customers impacted by the crisis in the form of deferrals, debt restructuring, instalment reductions and other options, and I am confident that given the circumstances and your regular repayment history, the bank would be supportive of providing you with the appropriate solution.

I wish you the very best of luck in your path to becoming financially stable in the near future.

Debt panellist 2: Ambareen Musa, founder and chief executive of

TESS is a stimulus package launched by the Central Bank in March. The primary goal under this programme is to enable banks to provide timely debt repayment relief to borrowers. We have seen banks across the UAE offer payment holidays to many borrowers over the past six months, however this relief option may not be available anymore based on your lender's discretion.

Although your bank is not offering the three-month payment holiday, you can still negotiate with them and request to have your loan terms restructured. Under a restructured repayment plan, the lender can increase your loan term, reduce your interest pay out or waive certain fees and penalties. The aim here is to lower your monthly instalments to make it more affordable for you.

In various instances, banks have proactively offered a restructured payment plan to borrowers who are struggling financially amid the Covid-19 pandemic. This also includes bank customers who have already used up their three-month payment holiday.

So reach out to your bank to see if there is an alternative solution available to you. Based on the information you provided, it also looks like your unpaid leave is about to end this month, and your salary payments should resume next month. You can provide the bank with this proof to support your case.

While you continue to negotiate with the bank, it would also be wise to consolidate your savings in case the bank asks you to meet the minimum payment requirement on your loan.

Have you considered working part-time or taking on additional freelance work to support yourself financially? Maybe your spouse could work to contribute to the family's finances. Look at all possible ways to unlock some income and cut back on expenses wherever you can.

Debt panellist 3: Steve Cronin, founder of

The Central Bank's TESS standards can be accessed from its website. The standards document is very clear that the programme will continue until December 31, 2020. In addition, limits on bank funding ratios for the biggest UAE banks were relaxed in August to allow them to provide further support to borrowers.

Having said this, there is a limit on how much each bank can borrow from the Central Bank at zero cost to enable them to offer payment relief for customers. If your bank has hit its limit on how much it can borrow from the Central Bank for this purpose, it may be reluctant to offer additional payment deferrals.

You have two lines of enquiry to pursue. First, you can try to talk to a different person at the bank, ideally as senior a person as you can find. Try a branch manager or ask to speak to a more senior person when on the phone. Make it clear you intend to raise your situation with the Central Bank’s Consumer Protection Department.

It is nearly three months since you have been placed on furlough. If you are going to be able to return to work soon, make sure the bank is aware of this so you can demonstrate your ability to pay off the overdue amounts in the near future. Meanwhile, do everything you can to reduce your living expenses and any remittances, so you can survive for longer on any savings and support that you do have.

Next, you can contact the Central Bank's Consumer Protection Department and check what is expected from your particular bank. You can visit their branch at Al Ghubaiba Street in Dubai or call 800 CBUAE. If you cannot make any progress, you may need to apply for insolvency, so that an intermediary can negotiate a plan with you and the bank.