PHOTO
Banks in the UAE have confirmed that, in compliance with the latest directive from the Central Bank, they will provide support to customers affected by the coronavirus by deferring loan payments and reducing banking charges.
The country’s regulator urged financial institutions on Saturday to come up with measures to mitigate the “adverse effects” of the virus on the UAE economy, such as “re-scheduling of loan contracts, granting temporary deferrals on monthly loan payments and reducing fees and commission” for affected customers.
It has also established a special committee engaging the UAE Banks Federation to assess the situation and identify possible solutions.
The virus that started in Wuhan, China in December has now spread to every continent, with more than 92,000 cases reported globally, including 27 in the UAE. Analysts have warned that the outbreak could slow down the global economy, as businesses and factories temporarily shut down, airlines cancelled flights and governments enforced travel bans to contain the spread of the virus.
“We have been closely monitoring [the] developments. We know that each of our customers has different needs, consequently we are working proactively on providing bespoke solutions to them based on their personal circumstances,” Subroto Som, Head of Retail Banking Group at Dubai-based Mashreq told Zawya.
It was not, however, immediately clear what specific measures the banks will implement to support customers impacted by the virus. But they said they will provide “tailored” solutions to each customer, adding that “communication between customers and banks” is also important at this time.
“HSBC always puts its customers first and it is standard practice for us to work with them to navigate changing circumstances,” a spokesperson for HSBC told Zawya.
In the UAE, where some public events have been cancelled and schools are scheduled to close doors for a month starting this Sunday, banks said they are keeping a close watch at the situation to ensure the economic impact is mitigated.
According to Som, there is “no one size fits all” approach to the situation, so they won’t be able to commit to a particular set of measures. “Each customer is unique and, therefore, we work to develop customised solutions, including deferring payments and reducing fees or charges, based on their circumstances,” Som said.
However, he lauded the move of the central bank, citing that it will send out a message of optimism and confidence to consumers, especially at a time when there’s a lot of global uncertainty.
“We welcome the directive from the UAE Central Bank, which we believe encourages consumer confidence,” Som said.
As of December 2019, total lending to the private sector in the UAE rose by 1.2 percent compared to the previous year, driven primarily by lending to private corporates, according to the latest central bank data.
The loans granted to individuals, however, declined slightly by 0.2 percent compared to the previous quarter and 1.4 percent compared to the previous year.
Banks in the UAE also saw their assets increase by 2.1 percent during the same period compared to the previous quarter and 7.6 percent compared to a year earlier.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
#UAE #BANKING #CORONAVIRUS #FINANCIALSERVICES
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2020
