Senior gov't official quoted as saying commercial banks will face penalties if they fail to help
Commercial banks in the UAE, a major financial hub, have been warned to help write off the debts of UAE citizens or face punitive measures, local media reported on Thursday, quoting a senior government official.
Banks must cooperate with the Debts Settlement Fund, a state-backed initiative set up in early 2012 to help heavily indebted Emiratis, said Ahmad al Zaabi, deputy minister for presidential affairs.
"We advise the banks that have not cooperated yet with the fund to do so," he said.
"If they continue to refuse to cooperate we will contact the Central Bank to publish the names of these banks. Decisions will be issued for the government to not cooperate with these banks," he added, The National newspaper reported.
He did not specify how many banks had failed to cooperate. The UAE banking industry federation and the central bank declined to comment on the reports, while a spokesman for the Debts Settlement Fundcould not be contacted.
Under the initiative, banks have to waive 50 percent of debtors' loans while the other half is settled by the 10 billion dirham ($2.7 billion) fund.
The fund has so far settled debts of 2,700 applicants out of a total of 6,000, paying more than 1.8 billion dirhams to banks, al Zaabi said at the opening of the fund's headquarters.
UAE nationals secured massive personal loans from banks during the boom years of 2003 to 2008, but found themselves struggling to repay debt after a financial downturn and real estate market crash.
Since then, the government has initiated a raft of welfare measures for UAE citizens, who are believed to account for fewer than 20 percent of a population which is as large as about 9 million people.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Absolutely unbelievable.....just unbelievable. Rack up debt from lavish lifestyles, fast cars, big homes, vacations etc and all is forgiven. "punitive measures" if they don't forgive the debt??? What a beautiful world for the preferential ones.
What a way to teach folks the value of money, huh? Borrow all that you like and don't worry about paying it back.
I can't imagine my country doing the same for it's indigenous people.
It's like that SNL Eddie Murphy skit from the early 80's where he goes undercover with makeup.
Wow, that is pretty unbelievable. What does this teach about fiscal responsibility?
We know the value of a human which is more important than the "value of money".
"Lavish ..., fast ..., big ..." are our problems. BUT, it is available for everyone in the country who focuses on developing himself and contributing positively to the country.
Anyway. Donâ€™t like it!! you are more than welcome to use any of the 7 airports available in the country to more than 180 destinations.
Mick, they will be paying it back to the government with no interest..... its a very good stop from the government to help save them from going to jail.....
Great. Easy answer, just take the next available flight.
Responsible it may not be.
i am so glad the government has taken this initiative, well they always do this for Citizens. thats why we call ourselves PROUD Emaratis, be it any of the 7 Emirates , we love UAE & we love the Government of UAE
If this is as straight forward as the article has it, this is truly revolting. The numbers indicate the average debt of the 2700 applicants so far is Dhs.670,000/- each!
This relief stands out like a sore thumb amidst the very same socio-economic set up that squeezes the life out of the blue collared.
Good initiative by a caring government. I wish govt direct all those foreigners who were defaulted no criminal intention and because of the financial crisis and being in Dubai at that time. At least a waiver of some percentage (or the interest accumulated) will help huge number of foreigners who can be out of jail or come back to UAE.
"If they continue to refuse to cooperate we will contact the Central Bank to publish the names of these banks. Decisions will be issued for the government to not cooperate with these banks," Isn't that would be called blackmailing!!!!
If the value of humans is more than the value of money, then should not the humans try to improve themselves in areas of education and higher productivity and "human values" ? Then why love what money can buy only "lavish.....fast....big" and give it primary importance to show that life is good ?
Giving preference to "human value" is not just the responsibility of the government. The citizens also have to demonstrate that they hold mental and spiritual growth far superior than basic physical growth of food, clothing and shelter.