People in the UAE have been affected economically by the novel coronavirus (COVID-19) outbreak that's pushed economies and markets down a dark pit.
In a joint effort to lift such burdens off of the residents' shoulders, a group of banks in Dubai will be offering a business relief package for their customers. The latter should be launched on April 1 and last until June 30, guaranteeing a three-month relief plan.
Leading Dubai banks Emirates NBD, Dubai Islamic Bank, Emirates Islamic, Mashreq, and Commercial Bank of Dubai are taking part in these efforts.
"The measures announced by the banks seek to support the UAE Government and the UAE Central Bank six-month economic stimulus package and the Dubai Government three-month economic stimulus package to support the business sector in the UAE and Dubai," the country's news agency WAM wrote in a statement.
"We recognise the need to protect those most vulnerable and are committed to lending a helping hand during this uncertain time," said Sheikh Ahmed bin Saeed Al Maktoum, chairman of Emirates NBD, according to Arabian Business.
"We would like to reassure our customers that they can continue to bank with us safely through our pioneering digital banking solutions. I am confident that the measures we have put in place, combined with our proven expertise in digital banking, financial strength and liquidity will help us continue delivering on our promise of superior customer service during this extraordinary time," Al Maktoum added.
Some of the measures to be implemented starting next month touch on different levels of customers, including "lenders' retail, business and small and medium-sized enterprises clientele."
Some of the measures are:
Individual Customers:
- Retail loan customers who have been placed on unpaid leave by their employers can approach the bank for repayment holiday of up to three months with zero interest and fees.
- Customers who have availed personal loans, auto loans or mortgages can apply for a one-month repayment holiday with zero fees.
- All first time home buyers can benefit from a 5 percent increase in the Loan-to-Value ratio (LTV) and full waiver of processing fees.
- A refund of charges on cash withdrawals done using debit cards on all ATMs of other banks across the UAE.
Small Business Customers:
- Small business customers who have availed merchant loans, equipment loans or business vehicle loans and have been impacted by the ongoing COVID-19 situation, can apply for a repayment holiday of 3 months with zero interest and fees.
- Reduction of the monthly minimum balance required for basic business banking account to AED 10,000. Also the minimum balance charges for the basic business banking account will be waived for a period of 3 months.
Individual Customers and Cardholders:
- Customers who have availed personal finance, auto finance or mortgages can apply for a one-month repayment holiday with zero fees Debit Cardholders can now withdraw cash for free from any other Banks’ ATMs in the UAE.
- Customers using credit cards for cash withdrawals will enjoy 50 percent reduction in the cash advance charges.
- Credit Cardholders can avail zero percent Easy Payment Plans (EPP) on school fee transactions with zero processing fee.-Credit Cardholders can benefit from special pricing on EPP & Cash on Call, and zero percent on Balance Transfers.
- Cardholders can request refunds on foreign currency charges related to Travel/Hotel cancellations.
The aforementioned banks are also encouraging their clients to use online banking for more safety. Quarantined customers can still go about everyday transactions "such as making transfers, remitting funds or paying bills conveniently via the Mobile Banking Apps or Online Banking platforms."
The UAE's Central Bank launched this plan in mid-March and more banks are following lead now
The Central Bank in the country announced a 100-billion dirham ($27.2 billion) "Targeted Economic Support Scheme" and other measures to reduce the economic effects of the COVID-19 pandemic on March 14.
The scheme involves funding worth $13.6 billion from which banks can draw collateralized funds at a zero percent interest rate, and another $13.6 billion will be made available through the easing of capital buffers.
"The scheme reduces domestic systematically important banks' buffers (D-SIB) as well as banks' capital conservation buffer (CCB), which will free up an additional Dh50 billion in banks' lending capacity," according to Gulf News.