With the COVID-19 virus spreading throughout the world and affecting UAE equally, we all are facing the inevitable economic ramifications. Our economies have dwindled and the whole ecosystem of the finance chain has become spineless…but worry must you not because your bank will help you during COVID-19. Considering such a pandemic scenario, different banks and regulators in UAE have stepped in to provide financial relief and aid to both retail customers as well as businesses. Know more below…
Which are the banks in UAE that have relief plans?
- Giants of banking in UAE such as Emirates NBD, Dubai Islamic Bank, Emirates Islamic, Mashreq, and Commercial Bank of Dubai had already announced a series of support measures that have remained in effect since April 1.
- In Abu Dhabi, First Abu Dhabi Bank, Abu Dhabi Commercial Bank as well as Abu Dhabi Islamic Bank are offering support measures for customers. The three banks have introduced 17 initiatives to support both individuals and businesses.
- Elsewhere in the UAE, RAKBANK, Sharjah Islamic Bank and Commercial Bank International – which is based in Dubai and listed on the Abu Dhabi Securities Exchange – have also pledged to help customers as they face the pandemic.
What are the relief plans for individuals in UAE?
The relief plans for individuals offered by various banks in UAE are as follows:
- In Emirates NBD, Mashreq, Commercial Bank of Dubai, Dubai Islamic Bank and Emirates Islamic, retail loan customers placed on unpaid leave can ask their bank for a repayment holiday of up to three months with zero interest and fees. Moreover, customers with personal loans, car loans, or mortgages can apply for a one-month repayment holiday with zero fees. Credit card customers can benefit from interest-free installment plans for all school fee payments as well as grocery purchases with no processing fees for up to six months.
- In First Abu Dhabi Bank, Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank, all customers are subject to a three-month payment holiday that applies to new loans and credit cards with a 50 percent reduction in charges. Additionally, interest charges on new loans will be reduced and bank charges for the early settlement of existing loans will be cut in half.
- RAKBANK is offering a one-time discount of up to 50 percent on overdue transaction fees. Customers can convert education and electronic spending on their credit cards into an Easy Payment Plan at 0 percent interest and zero processing fees for up to 24 months.
- Similar measures have been applied in Sharjah Islamic Bank. Any retail customer who has been made redundant or failed to receive their salary due to the current economic conditions can request to defer installments for three months at no charge. Payments on real estate loans can be deferred for one month.
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What are the relief plans for businesses in UAE?
- In Emirates NBD, Mashreq, Commercial Bank of Dubai, Dubai Islamic Bank and Emirates Islamic, small business customers holding merchant loans, equipment loans or business vehicle loans can apply for a repayment holiday of three months with zero interest and fees. Also, the monthly minimum balance required for a basic business banking account has been reduced to Dh 10,000.
- In First Abu Dhabi Bank, Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank, interest charges on new borrowing have been reduced and bank charges for early settlement of existing loans have been cut in half for all business customers.
- RAKBANK has reduced its SME Prime lending rate and is offering payment holidays for business loans or asset-backed loans for a period of up to six months.
- Sharjah Islamic Bank has reduced the minimum account balance to Dh10,000.
What additional help will be provided to those who are affected by Covid-19?
- For all individual customers of First Abu Dhabi Bank, Abu Dhabi Commercial Bank and Abu Dhabi Islamic Bank affected by Covid-19, a three-month payment holiday has been applied to existing loans and credit cards with no additional bank charges. Foreclosures on mortgages have been halted until June 30. Freezing bank accounts has been stopped for customers that are made redundant or have their salaries reduced, until September 30.
- All affected business customers of First Abu Dhabi Bank, Abu Dhabi Commercial Bank, and Abu Dhabi Islamic Bank can apply a deferment of loan payments for up to three months to existing borrowing. The respective bank merchant’s service charges have been cut in half for eligible SME customers with annual credit card transactions of less than Dh 5 million. Moreover, bank fees and charges have been reduced by up to 50 percent for “Zero Balance” accounts.
At a time like this, the stability of the UAE’s banking system is of utmost importance. Therefore, it is great to see banks step up and support the government and the central bank’s economic relief efforts. Even though there aren’t specific clauses that address individual situations, banks are offering refinancing, repayment deferrals, and lower repayments where required.