UAE Central Bank says 75% of Dh50bn pandemic liquidity facility drawn down

A total of Dh37.2bn from the targeted economic support scheme has been used to date

Deputy Prime Minister and Minister of Presidential Affairs, Sheikh Mansour bin Zayed, has been appointed as chairman of the Central Bank of the UAE. Ryan Carter / The National

Three-quarters of the Dh50 billion worth of interest-free loans, provided by the Central Bank of the UAE, to support businesses and individuals struggling as a result of the Covid-19 pandemic has been drawn down.

"To date, 75 per cent was already draw[n] down from the Dh50bn liquidity facility, equivalent to Dh37.2bn total consumption of allocated funds," the central bank said in a statement.

"During the past two weeks, additional banks have joined the scheme, increasing the total number of banks participating in TESS [Targeted Economic Support Scheme] to 24," it added.

The central bank first rolled out details of TESS in March as it unveiled a Dh100bn stimulus package  to support companies and individuals affected by measures taken to stop the spread of the pandemic.

This included the Dh50bn of zero-cost collateralised loans now being drawn down and a loosening of banks' capital buffers, giving them more firepower to lend. Further loosening of capital and liquidity buffers has since increased the size of this stimulus to Dh256bn.

Banks have announced a series of measures to support customers, including three-month payment holidays on loans, cuts in interest rates and reductions in banking fees.

For businesses, the central bank ordered lenders to remove requirements for SMEs to have a minimum account balance of Dh10,000 before opening accounts and urged them to speed up account opening times to two days, unless potential customers were deemed to be high-risk under anti money-laundering rules.

For individuals, other support measures have included increasing the loan-to-value limit banks can offer on home loans, meaning the size of deposit required reduces to 20 per cent for first-time expatriate buyers and 15 per cent for Emiratis.

The central bank also said it will publish a list next week of the lenders that have availed more than 50 per cent of the funds allocated to them under TESS.