Dubai bank relief to avert defaults

By Waheed Abbas

Published: Sun 22 Mar 2020, 8:15 PM

Last updated: Mon 23 Mar 2020, 10:17 AM

The relief package rolled out by Dubai banks for small, medium and large businesses on Saturday will ease pressure, allow better financial management and save many firms from defaulting on their payments, according to executives of top UAE-based companies.
Dubai's top banks Emirates NBD, Mashreq Bank, Commercial Bank of Dubai, Emirates Islamic and Dubai Islamic Bank announced a relief package for individuals and companies, offering repayment holidays as well as a number of other relief measures to companies affected by coronavirus. Abu Dhabi-based banks had also announced similar measures earlier for their customers.
These measures have been announced following the instructions of the Central Bank of the UAE to pass on the benefits of a Dh100 billion stimulus package announced by the apex bank earlier this month.
"We believe that the relief package will lend a helping hand to small and medium enterprises that are heavily impacted by the current situation, which will in turn have a positive effect on stabilising the economy. we are sure that the new decisions will help ease pressure on the general public and allow better financial management in the coming times," said Niall McLoughlin, senior vice-president at Damac Properties.
Adeeb Ahamed, managing director of Lulu Financial Group, said it is reassuring to see that just a week after the central bank rolled out its stimulus, banks in Dubai and Abu Dhabi have passed on the benefits of this move to retail, SME and corporate customers.
"The crisis arising out of the present pandemic has affected a clutch of performance parameters, which directly and indirectly affect an organisation's financial health. In this light, apart from the refinancing options for corporates, we also welcome the refunds and waivers introduced for retail customers, which in the short-term will help lower the financial stress on companies employing them. We see the new measures as a positive step in our efforts to maintain business continuity amidst these trying times," said Ahamed.
Kamal Vachani, group director of Al Maya Group, also welcomed the initiative, saying a lot of SMEs and large enterprises from the retail sector will surely benefit from this initiative because the timing of it is highly critical.
"These are unprecedented times and require such unprecedented steps at the government level. We are happy that the government and its institutions are highly forthcoming to provide relief to individuals and businesses," he said.
Imran Farooq, CEO of Samana Group, said the relief packages will definitely give a helping hand to retail and wholesale debtors.
"It will give them a crucial break for focusing on coping with the current challenging situation. Banks' support will give the much-need time to mortgage customers to readjust their payments, save them of defaults and boost customer trust in the UAE's banking system," he added.
Manufacturers also welcomed the relief package by the local lenders, which support continuity of their operations.
"We, as a manufacturer, will be happy to hear maximum support from our buyers and our suppliers in order to match the required demand and supply cycles. We will have to manage accordingly and will share our thoughts to our financial partners to address it in line with our requirements. I hope the initiatives will help the entire UAE business community to continue their presence and stay in business in such situations," said Bharat Bhatia, CEO of Conares.
Hisham Farouk, Grant Thornton's UAE CEO, said the relief package is another positive step that provides the general economy with a more tangible and defined outlook to the central bank's economic stimulus package.
"During these uncertain times, the relief package supplies for a much-needed clarity on how it aims to assist SME's and corporates that are active in the severely affected sectors. By way of financial aid, businesses will have more room to focus on safeguarding the health of their human resources, and by extension, the general public. Also, they will be able to focus their resources to build resilient structures and to master ways to remain agile and alert," said Farouk. Given the rapid and ongoing development of the outbreak's economic repercussions and its long-lasting impact, such initiatives should not be of a momentary nature, but to be reviewed and measured constantly in the long-term, and to be added to if need be, he added.
Ali Shabdar, regional director for Middle East and Africa at Zoho, hailed the three-month financial stimulus package as businesses had started feeling the economic impact of the Covid-19 outbreak on their bottomline.
"Coupled with well-executed control and containment measures implemented by the authorities to ensure the wellbeing of the citizens and residents alike, we are more confident than ever that we will weather these challenging times with minimal impact and very soon," said Shabdar.

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