The UAE Central Bank announced the launch of a “Targeted Economic Support Scheme”, a Dh100 Billion stimulus to alleviate the expected negative economic impact of the Coronavirus pandemic.
Key takeaways:
- Dh50 billion loan to local banks at zero interest rate;
- All banks allowed to use up to 60% of capital conservation buffer; systemically important banks (deemed as such by the UAE Central Bank) allowed to use up to 100% of their capital buffer;
- 15-25% reduction of capital to be held by banks for their loans to SMEs;
- Maximum loan-to-value on mortgages for first-time buyers increased by 5% contributing to the affordability of housing without increasing inherent risks;
- 10% increase of exposure to real estate sector banks are allowed to have (i.e 30% as of now) provided they hold sufficient capital;
- Reduced fees incurred by merchants when receiving payments by Debit and Credit cards;
- Limit on bank charges for SME customers; minimum account balance capped at Dh10,000;
- Subject to Anti-Money Laundering and Counter-Terrorism Financing obligations, a 2-day deadline set for account opening for SMEs;
- 20% refund on customs fees imposed on imported products sold locally;
- 10% reduction on water and electricity bills;
- 50% reduction of deposit to be paid for water and electricity connections;
The Targeted Economic Support Scheme is effective as of March, 15th 2020 for a period of 6 months.
During this period, the Central Bank shall be waiving all fees it charges for payment services provided to banks operating in the UAE.
We are closely monitoring the situation and shall keep you updated as details are released.
In the meantime, you may read our other alerts on the topic to find out about the measures implemented from an immigration standpoint