UAE banks return Dhs14.47bn received from Central Bank’s TESS initiative

UAE national banks have returned close to Dhs14.47bn from the stimulus they garnered from the country’s central bank to combat the fallout of the Covid-19 pandemic, the authority’s statistics have revealed.

A Dhs100bn Targeted Economic Support Scheme (TESS) initiative was launched by the Central Bank of the UAE (CBUAE) in March 2020 to support the local economy during the pandemic, which consisted of zero-interest, collateralised loans worth Dhs50bn for local banks and an additional Dhs50bn freed up from banks’ capital buffers.

According to the terms of the TESS initiative, participating banks can use the funding to offer temporary relief to the private sector and retail customers for a period of up to six months.

The scheme also aims to ease principal and interest payments on outstanding loans, official news agency WAM reported.

Read: UAE Central Bank announces Dhs100bn package to counter Covid-19

In November last year, the central bank announced that it would extend the validity of key components of the TESS initiative until June 30, 2021.

The duration of the Zero Cost Facility (ZCF) of Dhs50bn, which benefits retail and corporate banking customers and facilitates liquidity management for banks through collateralised funding at zero cost, will be extended for an additional period of six months.

Read: UAE Central Bank extends Targeted Economic Support Scheme until June 2021