The UAE Central Bank has extended its Targeted Economic Support Scheme (Tess) for another six months until June 30, 2021 to continue its support for the economy during the Covid-19 pandemic.
From January 1, 2021, banks and finance companies participating in the Scheme will be able to provide new loans and facilities to customers affected by the pandemic within the applicable terms and conditions set by the Tess standards.
Under this new extension, the Central Bank will extend the duration of the Zero Cost Facility (ZCF) of Dh50 billion, which benefits retail and corporate banking customers and facilitates liquidity management for banks through collateralised funding at zero cost, for an additional period of six months.
The scheme was first launched in March 2020 to support individuals and private sector firms through a range of integrated relief measures to the banking sector related to funding, liquidity, lending and capital.
“The Central Bank remains committed to supporting the financial system of the UAE by taking the required measures to accelerate economic recovery from Covid-19 repercussions. The extension of applicability period of the Tess will provide relief for retail, small and medium sized enterprises, and corporate banking customers. We believe that this initiative will shield the economy from the impact of the pandemic and place us in an ideal position to recover, once the pandemic is over,” said Abdulhamid M. Saeed Alahmadi, governor of the Central Bank of the UAE.
Daniel Richards, Mena economist at Emirates NBD Research, said banks will be able to extend deferrals to customers who qualify for support under this scheme.
321,500 individuals, firms benefit
To date, the Tess loan deferral programme benefited more than 310,000 retail customers, nearly 10,000 small and medium sized enterprises, and more than 1,500 private sector corporates.
The Central Bank of the UAE has also announced a gradual implementation schedule of the remaining parts of the Basel III compliance project in three stages, starting from Q2 2021 until Q2 2022 to apply international regulatory standards.