The Central Bank of the UAE said on Monday that it will extend the Dh50 billion Targeted Economic Support Scheme until June 30 next year in an effort to continue supporting the economy.
The scheme was launched in March to support the UAE’s economy through the pandemic, offering zero-cost collateral funding to banks as a way of keeping lending flowing to the broader economy. It was part of an initial package of relief measures worth Dh100bn that also involved relaxing banks' liquidity and capital requirements.
The banking regulator will extend the duration of the Dh50bn zero-cost loan element for an additional six months to help banks to continue managing their liquidity, it said in a statement on Monday.
"The extension of applicability period of the Tess will provide relief for retail, small and medium sized enterprises and corporate banking customers," Abdulhamid Saeed Alahmadi, Governor of the Central Bank of the UAE, said.
"We believe that this initiative will shield the economy from the impact of the pandemic and place us in an ideal position to recover, once the pandemic is over.”
The central bank rolled out Tess in March as part of a Dh100bn stimulus package to support companies and individuals affected by the economic fallout from Covid-19. The initiative also gave the banks more firepower to lend after the regulator loosened capital requirements. Further loosening of capital and liquidity buffers has since increased the size of this stimulus to Dh256bn.
The Tess scheme has benefited more than 310,000 retail customers, nearly 10,000 small and medium sized enterprises, and more than 1,500 private sector corporates, the central bank said.
The regulator also said it would begin a gradual implementation schedule for lenders to adopt the remaining parts of the Basel III global banking rules, which will take place in three phases from the beginning of next year to the first quarter of 2022.
The UAE, which was the first country in the Middle East to roll out stimulus amid the pandemic, has introduced various measures to help the economy recover.
The country on Saturday also revealed an economic vision for the next five decades. The plan aims to stimulate entrepreneurship and foreign trade; create partnerships to attract investments and talent and cultivate the skills of Emirati professionals to position them to lead the future economy.
