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Central Bank extends economic stimulus period

TESS has benefited 315,000 businesses so far

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The Central Bank of the UAE (CBUAE) has extended the applicability period of the key components of its economic stimulus package, the Targeted Economic Support Scheme (TESS), until 30 June 2021.

The TESS was launched by the CBUAE in March 2020 to support the UAE’s economy during the COVID-19 pandemic, through a range of integrated relief measures to the banking sector related to funding, liquidity, lending, and capital.

Under this extension, the CBUAE will extend the duration of the Zero Cost Facility (ZCF) of AED 50 billion, which benefits retail and corporate banking customers and facilitates liquidity management for banks through collateralized funding at zero cost, for an additional period of six months.

Starting from 1 January 2021, banks and finance companies participating in the TESS will be able to provide new loans and facilities to customers negatively affected by the pandemic within the applicable terms and conditions set by the TESS standards.

CBUAE is committed to supporting the financial sector of the UAE by taking the measures required to accelerate economic recovery after COVID-19. The extension of the applicability period of TESS will provide relief for retail, small and medium sized enterprises, and corporate banking customers.

TESS succeeded in enhancing the financial system’s capacity to support individuals and businesses affected by the COVID-19 repercussions. To date, the TESS loan deferral program has benefited more than 310,000 retail customers, nearly 10,000 SMEs, and more than 1,500 private sector corporates.

CBUAE 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, as part of its commitment to the application of the international regulatory standards in the UAE.