As the coronavirus pandemic continues to affect lives and livelihoods across the UAE, residents and businesses will benefit from an AED50 billion extension of the country’s economic stimulus package until 30 June 2021. The Central Bank of the UAE (CBUAE) launched its Targeted Economic Support Scheme (TESS) in March with an integrated stimulus program.
Launched in March and now valid until 30 June 2021, TESS aims to support the UAE’s economy through a range of relief measures related to funding, liquidity, financing, and capital. The stimulus package was initially worth AED100 billion, comprising AED50 billion from CBUAE funds in collateralized finance with a zero-cost facility (ZCF) to all UAE banks, and another AED50 billion freed up from banks’ capital buffers. The total package was later increased to AED256 billion.
The ZCF has now been increased again by an additional AED50 billion from 1 January 2021 to 30 June 2021.
CBUAE made the new funds available to banks. The money helps customers affected by COVID-19 who are unable to repay personal or business finance.
Participating banks may use the funding to offer temporary relief to the private sector and retail customers for up to six months. TESS relief is not a cancellation of outstanding financial obligations, but a deferral of such payments, according to the merits of each case. TESS is disbursed according to specific standards. These are available on the
CBUAE website.
Over 320,000 customers had benefited from the TESS finance deferral program as of early November. Of these, 310,000 were retail customers, 10,000 were small and medium enterprises, and another 1,500 were private sector corporates, according to CBUAE data.
If you haven’t already applied for TESS, you will be given priority. However, if you are applying for a second time, your case will be considered on merit.
Types of TESS relief include payment holidays on existing finance or payment cards, relief on business and home finance, no-fee instalment plans for utility bills, profit-free instalment plans for school fee payments, and lowered bank charges for the early settlement of existing finance. Options to banks include deferment of principal only, deferment of both profits and principal repayment, or deferment of profit only. Each case is evaluated on an individual basis.
You don’t need to pay for TESS. Banks may not charge any fees or profit on the deferred payments. However, if you default on the new schedule determined by the bank, penalties may apply. Clarify any questions past your bank beforehand.
TESS is not a cancellation of your outstanding debts. Rather, TESS is a payment holiday – or deferment – on finance for those affected by COVID-19. So yes, you still need to pay back any outstanding amounts. The repayment schedule will be determined by your bank.
Individuals and businesses affected by a liquidity crunch because of COVID-19 need to approach their banks directly or ask their relationship managers for help on existing obligations.
Be aware that TESS is implemented differently across different banks in the UAE and you must ask your bank for TESS relief. Decisions are taken on a case-by-case basis. Customers may be asked to provide a few documents, including an employer’s letter about their employment status in the case of individual customers.
If you are an ADIB customer, dial 600 543216.