UAE banks get Dhs44.72 billion liquidity facility under TESS

A total of Dhs44.72 billion of the Dhs50 billion liquidity facility provided by the Central Bank of the United Arab Emirates (CBUAE) to the UAE banking sector as part of the Targeted Economic Support Scheme(TESS) has been drawn down by UAE lenders until the end of July, figures released by the CBUAE have shown.

On March 15, CBUAE announced a Dhs100 billion stimulus package as a counter-measure to address the COVID-19 in the country. TESS includes Dhs50 billion of zero-interest, collateralised loans for UAE-based banks. It also entails Dhs50 billion funds freed up from banks’ capital buffers. Participating banks should use the funding to offer temporary relief to private sector and retail customers for a period of up to 6 months. The scheme also aims to ease principal and interest payments on outstanding loans.

According to the statistics, a total of Dhs44.38 billion has been drawn down during June, Dhs42.33 billion in May and Dhs31.85 billion by the end of April.

Up to 26 banks have availed the TESS with the number of beneficiaries amounting to more than 140,000, including individuals and corporates.

The Board of Directors (BoD) of the Central Bank of the United Arab Emirates (CBUAE), recently reviewed the new initiatives and continuous development plans which envisage the apex bank seeking to become one of the best in the world in line with the directives of Sheikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, and the CBUAE Board Chairman. This came at the bank’s 8th board meeting this year at Qasr Al Watan under the chairmanship of Sheikh Mansour and in the presence board members and a number of senior officials and bankers. The board members addressed the bank’s operational plans and approved the consumer protection framework and regulatory oversight of the UAE banking industry. The board members were also briefed on the CBUAE’s risk governance framework pertaining to anti-money laundry and combatting the financing of terrorism.

The attendees listened to a presentation on the new system for stored values, which has been developed and approved by the bank to provide disruptive solutions for facilitating retail payment services. At the end of the meeting, Sheikh Mansour thanked the board members for their efforts and called for ensuring synergy to contribute to the realisation of the UAE’s wise leadership vision of reaching advanced spots in the relevant competitiveness indicators, and reflect all expectations from the effective role of the Central Bank. The board meeting was attended by Abdulrahman Saleh Al Saleh, the Vice Chairman; Abdulhamid Mohammed Saeed, the Governor; and Younis Haji Al Khoori, Khalid Mohammed Salem Balama, Khalid Ahmad Humaid Al Tayer, and Dr Ali Mohammed Al Rumaithi, the board members.

Abdulhamid Saeed Alahmadi, Governor of the Central Bank of the UAE has said earlier that in light of the COVID-19 pandemic, central banks across the globe have played a fundamental role in promoting continued economic activity and safeguarding their respective banking and financial sectors.’

“CBUAE will continue to work alongside central banks and monetary authorities to develop plans and policies aimed at swiftly and effectively responding to crises. In our supervisory role mandate, we shall continue to adhere to the Financial Action Task Force (FATF), standards in order to ensure the UAE’s financial system is sound and inclusive taking into consideration the Bank for International Settlements guidelines in this regard,” Alahmadi told the 44th meeting of the Council of Arab Central Banks and Monetary Authorities Governors.

Alahmadi addressed several topics in light of the implications of COVID-19 pandemic. The meeting was also attended by experts from various international institutions where one of the key subjects discussed was the progress in efforts to combat money laundering and terrorist financing and the importance of expanding financial inclusion.

Dr Marcus Pleyer, President of FATF, addressed this topic citing that corruption is a global issue that widely affects communities worldwide, specifically in developing countries which are increasingly vulnerable to these unlawful acts. He commended the efforts taken by Arab countries to develop the required frameworks and measures to combat money laundering and financing of terrorism and urged them to undertake further actions in this regard, noting that this matter should be a top priority especially during the spread of Covid-19.

In line with the FATF’s directives, the National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organisations chaired by the Governor of CBUAE, has adopted several initiatives to mitigate financial crimes.

This includes the launch of a smart platform “FAWRI TICK” that supports communication and coordination between relevant government authorities and features rapid detection of financial risks. In support of the Committee’s efforts, the Financial Intelligence Unit, FIU, is actively collaborating with the relevant UAE authorities, together with CBUAE, to develop effective means of cooperation through various actions.

Agencies