The UAE Central Bank urged lenders to support the private sector and individual borrowers to cushion the impact of Covid-19, and disbursed Dh10 billion worth of zero interest loans to banks from the Targeted Economic Support Scheme launched last month.
"We urge banks and financial institutions to act in the best interest of retail clients, private sector corporates and SMEs, which are the growth engine of our economy," governor Abdulhamid Saeed said on Sunday after his first meeting with chief executives of banks operating in the country since his appointment.
In addition to disbursing Dh10bn of the Dh50bn made available to lenders under TESS, the Central Bank also provided more than Dh61bn in the form of lowered cash reserve requirements that are to be used to support companies and customers adversely affected by the pandemic.
The aggregate value of all capital and liquidity measures adopted by the regulator under TESS amounts to Dh256bn.
The coronavirus outbreak is the biggest challenge to the global economy since the 2008 financial crisis and has brought the world economy to a halt.
It has rattled investors and wiped out about $17 trillion (Dh62.4tn) from stock markets worldwide.
Global equity markets are now valued at $72.16tn, from a high of $89tn earlier this year, according to Bloomberg data.
The Central Bank said it will be reaching out to the banks in the coming days to review "how they plan to serve the objectives of TESS and help their customers to cope with the consequences of Covid-19 pandemic".
Mr Saeed "stressed the importance of banks' steadfast commitment to making active use of TESS and utilising the scheme to the full extent for the benefit of corporates, individuals and the economy in general".
The governor said the breadth and depth of banks' participation in the programme will be a fundamental factor in its success "as we aim to cushion the economic impact of the pandemic on companies as well as individuals".
He urged banks that have yet to take part in the programme "to do so at the earliest, to protect our economy".
“I am confident that the scheme will act as a catalyst to strengthen economic activity and effectively mitigate financial risk, while also ensuring that the businesses are prepared for the post-Covid-19 era,” Mr Saeed said.
More than 1.8 million people have been infected globally by the virus and more than 114,000 have died, according to Johns Hopkins University, which is tracking the outbreak. Over 430,000 patients have recovered so far.
The International Monetary Fund said the global economy is now in a recession as a result of the outbreak.
It is projected to contract more than 1.5 per cent this year, according to some estimates, and the IMF expects economic recovery to begin next year.
The pandemic has forced governments to shut borders, disrupted trade and brought travel and tourism to a halt. About 75m tourism sector jobs are at risk worldwide.
Governments worldwide have aunched stimulus packages worth more than $8tn to support their economies as unemployment surges due to lockdowns and restrictions on movement.
About 17 million Americans have lost their jobs in the past three weeks.