Coronavirus: UAE banks offer relief on loan, credit cards

3140
UAE dirham currency

Web Report

The UAE’s five major banks – Emirates NBD, Dubai Islamic Bank, Mashreq Bank, Emirates Islamic and Commercial Bank of Dubai – have rolled out a host of relief measures for their individual and corporate customers to fight the impact of coronavirus.

The measures, which will be in effect from April 1 to June 30, have been announced on the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, as well as in line with the instructions of the Central Bank of the UAE to pass on relief to customers under its Dh100 billion stimulus package announced last week.

“We recognise the need to protect those most vulnerable and are committed to lending a helping hand during this uncertain time,” said Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Emirates NBD, President of the Dubai Civil Aviation Authority, Chairman of Emirates airline and Chief Executive of the Emirates Group.

For individual customers, the three commercial banks announced that those employees who have been placed on unpaid leave can approach them for a repayment holiday of up to three months with zero interest and fees.

They are also offering one-month repayment holiday with zero fees for personal loans, auto loans and mortgages to individuals.

In addition, customers will also get a refund on charges on cash withdrawals done through debit cards on all ATMs and other banks.

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. This is in addition to existing attractive low interest, installment plans available for higher tenors across all retail purchases, the banks said in a statement.

Those customers who want to cancel their travel bookings done on their credit and debit cards will receive a refund of the foreign currency transaction fees charged by the bank. Also, customers using credit cards for cash withdrawals will have 50 per cent reduction in the cash advance charges.

First-time home buyers will benefit from a 5 per cent increase in loan-to-value ratio and full waiver of processing fees.

“We were among the first to recognise the needs of our customers, and the measures we are announcing will supplement the reduced fees and charges we already put in place for corporate banking customers two weeks ago,” said Sheikh Ahmed.

Earlier, Abu Dhabi-based lenders also announced measures on the similar lines to help their retail and corporate customers.

While revealing details of incentives for small and medium businesses, the three commercial banks said those customers who have availed merchant, equipment or business vehicle loans and have been impacted by the ongoing Covid-19 situation can apply for a repayment holiday of three months with zero interest and fees.

Moreover, the three banks reduced the monthly minimum balance requirement for basic business banking accounts to Dh10,000. The minimum balance charges for the basic business banking account will be waived for a period of three months.

For large corporates, they are offering refinancing repayment deferrals or lower payments where required. They are also offering to reduce bank charges for trade finance customers as well as enhanced credit and trade lines to manage their operational costs.

Dubai Islamic Bank (DIB), the emirate’s largest Shariah-compliant bank, offered a one-month repayment holiday on individual loans, free cash withdrawal from any other banks’ ATMs, 50 per cent cut in bank charges to those customers who use credit card for cash withdrawals and zero processing fee on payment of school fees, among others.

DIB said existing and new customers impacted by Covid-19 and facing unpaid leave or any other challenges can request up to three deferred monthly installments without fees and profit charges. Also, debt consolidation will be provided upon request by the bank.

The lenders will work alongside and support those investors who are faced with margin calls on their shares portfolio.

“DIB is prepared to act quickly and effectively to ensure that our customers are fully supported in this period and the economic burden created by the Covid-19 outbreak is minimised as far as possible. In this respect, we have taken steps to ensure both physical and financial health and security of our entire client base and assure everyone that we remain committed to the UAE and all its residents as a trusted and reliable financial partner,” said Mohammed Ibrahim Al Shaibani, Director-General of His Highness The Ruler’s Court of Dubai and Chairman of Dubai Islamic Bank.

Humaid Al Qutami, chairman of Commercial Bank of Dubai, said that the measures are fully-aligned with the guidance of the government and the Central Bank of the UAE, to ensure that clients will continue to operate successfully. “The combination of deferring payments, reducing or waiving selected fees and supporting those whose jobs have been affected will enable corporations and individuals throughout the UAE to weather these unprecedented challenges. We encourage our customers to reach out to us, preferably through digital channels, to utilise the measures implemented today,” he said.

Hesham Abdulla Al Qassim, chairman of Emirates Islamic, said the bank will continue to create meaningful additional measures to support those affected with the coronavirus outbreak. “We remain proactive through this rapidly evolving period and are among the first in the Islamic banking sector to recognise the needs of our customers,” he said.

Abdul Aziz Al Ghurair, chairman of Mashreq Bank, said this relief package will reduce the risk many customers face of being exposed to temporary cash flow shortfalls during this trying period.

“In accordance with this announcement, banks will show more flexibility to stressed customers during this difficult time and support its retail, SME and corporate customers through several specific initiatives targeted at reducing their financial burdens,” said Al Ghurair.

The Dubai banks have also announced that all their branches continue to remain open to serve customers. The banks have undertaken precautionary measures across their branch network, ATM and cash deposit machine locations, including additional deep cleaning and sterilisation protocols for the safety of their customers.