The Central Bank of the UAE, CBUAE, has announced the extension of the applicability period of the key components of its economic stimulus package, the Targeted Economic Support Scheme (TESS) until 30 June 2021.
The TESS was launched by the CBUAE in March 2020 to support the UAE’s economy during the COVID-19 pandemic, through a range of integrated relief measures to the banking sector related to funding, liquidity, lending and capital.
Under this extension, the CBUAE will extend the duration of the Zero Cost Facility (ZCF) of AED 50 billion, which benefits retail and corporate banking customers and facilitates liquidity management for banks through collateralised funding at zero cost, for an additional period of six months. Hence, starting from 1 January 2021, banks and finance companies participating in the TESS will be able to provide new loans and facilities to customers negatively affected by the pandemic within the applicable terms and conditions set by the TESS standards.
Abdulhamid M. Saeed Alahmadi, Governor of the Central Bank of the UAE, said: “The Central Bank remains committed to supporting the financial system of the UAE by taking the required measures to accelerate economic recovery from COVID-19 repercussions. The extension of applicability period of the TESS will provide relief for retail, small and medium sized enterprises, and corporate banking customers. We believe that this initiative will shield the economy from the impact of the pandemic and place us in an ideal position to recover, once the pandemic is over.”
The CBUAE’s TESS succeeded in enhancing the financial system’s capacity to support individuals and businesses affected by the COVID-19 repercussions. To date, the TESS loan deferral programme benefited more than 310,000 retail customers, nearly 10,000 small and medium sized enterprises, and more than 1,500 private sector corporates.
The Central Bank of the UAE has also announced a gradual implementation schedule of the remaining parts of the Basel III compliance project in three stages, starting from Q2 2021 until Q2 2022, as part of its commitment to the application of the international regulatory standards in the UAE.