Sunday, May 20, 2012
DUBAI (Zawya Dow Jones)--The government of the United Arab Emirates will settle or restructure the toxic loans of about 368 U.A.E. nationals worth nearly 568 million U.A.E. dirhams ($154.6 million), the country's state run agency WAM reported Sunday.
The oil-rich Arab country's president "Sheikh Khalifa bin Zayed Al Nahyan has ordered settlement of defaulting personal loans of citizens whose debts are less than AED5 million, be they in detention, pending trial or convicted, or settling their debts through installment schedules set by the courts," WAM said.
The order is based on a recommendation by the U.A.E.'s Supreme Committee of the Debts Settlement Fund for Citizens with limited income, whereby the government settles with the concerned banks, fully or partially, its citizens' loans that are under AED5 million.
The total number of locals impacted by the presidential order is "368 citizens with total defaulting debts of AED568 million, of whom 60 locals are detained or had court sentences issued against them with a total sum of AED68.8 million," WAM said.
A government official, who asked not to be named, told Zawya Dow Jones the debt process is one where the government negotiates with banks.
"Some of the debt will be paid by the government, while other loans would be restructured over a longer period without interest," he said.
Sunday's order is the second step by the government to settle the loans of Emirati nationals. The SCD Fund, established in December with a capital of AED10 billion, cleared the loans of locals with debts less than AED1 million last year.
"The first step saw the government settling the debts of about 6,700 citizens whose loans were under AED1 million each," the government official said.
-By Leila Hatoum, Dow Jones Newswires; +971-4-446-1686; leila.hatoum@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
20-05-12 1153GMT
