Authorities in the UAE have announced they are setting aside Dhs1.05bn ($410 million) to help clear the defaulted debts owed by its nationals.
In a statement on state media news agency WAM on Monday, the Higher Committee of the Nationals’ Defaulted Debts Settlement Fund approved the sum following a directive by the Gulf state’s president HH Sheikh Khalifa bin Zayed Al Nahyan, which will see debts owed by Emiratis wiped clean.
The new directive states that banks have agreed to cut interest on monies owed by one per cent and that loan repayments by citizens in debt will not exceed 50 per cent of their monthly salaries.
The statement said: “The agreements endorse mechanisms for settling defaulted loans owed by nationals against whom courts of law have passed judgments or cases are pending.”
The news did not include how many UAE nationals would be eligible.
The banks taking part in the scheme, which made the origina prosposals, are National Bank of Abu Dhabi Bank, Abu Dhabi Commercial Bank, First Gulf Bank, Abu Dhabi Islamic Bank, Union National Bank and Al Hilal Bank.
It is not the first time authorities in the UAE have assited nationals in financial difficulty. Earlier this year, President Sheikh Khalifa Bin Zayed Al Nahyan allocated around Dhs5 million to settle defaulted loans for each indebted citizen. In August, the Central Bank ordered lenders to extend maturities on personal loans held by Emiratis by more than four years.