The Central Bank of the UAE has ordered lenders to accelerate the account opening process to a maximum of two days for SMEs
The UAE central bank has urged lenders across the country to use the $70 billion allocated to support the economy under the Targeted Economic Support Scheme (TESS).
The scheme was launched on March 14 and runs up to the end of 2020. It provides relief for eligible customers whereby they are not required to pay their bank any installments consisting or interest for the agreed deferment period.
The bank’s governor Abdulhamid Saeed said, “Banks have already utilised over 30 percent of allocated funds from the TESS facility and are actively passing on these funds to their customers affected by the COVID-19 pandemic.”
“We will continue to work closely with banks and financial institutions to accelerate their full utilisation of the TESS. This requires banks to closely collaborate with us and intensify their efforts to implement the economic stimulus package for the benefit of the banking sector and the UAE economy,” he added.
As part of the central bank’s guidelines to utilise the funds, lenders are asked to process more applications from individuals, corporates and SMEs who have been affected by the pandemic; treat their customers fairly by retaining lending standards; postpone payments of interest and/or principal of loans.
The UAE’s central bank has also ordered banks to accelerate the account opening process to a maximum of two days for SMEs, unless the customer is identified as high risk in terms of anti-money laundering.
In terms of SMEs, banks should also waive the minimum account balance which amounts to over AED10,000.
They’re also requested to reduce the minimum required down payment for real estate.
However, the customer is required to pay any interest accrued during the deferment period on the principal amount at a later date.
In May, the UAE central bank will publish the TESS facility usage by individual banks.