Abu Dhabi banks announce 17 initiatives amid Covid-19 crises

Amid rising Covid-19 concerns and hovering economic uncertainly, the Abu Dhabi government has announced a series of financial incentives, official news agency WAM reported.

Several Abu Dhabi banks, namely First Abu Dhabi Bank (FAB), Abu Dhabi Islamic Bank (ADIB) and Abu Dhabi Commercial Bank (ADCB) – in coordination with the Abu Dhabi Department of Finance and the Abu Dhabi Department of Economic Development, have formulated a package aimed at supporting the community and businesses in the emirate.

Designed to provide relief to individuals and small to medium-sized enterprises (SMEs) in Abu Dhabi, these 17 financial initiatives aim to reduce finance-related costs, while facilitating access to financing.

Of these measures, 10 are banking-related designed specifically for individuals, while seven initiatives are for SMEs.

Individuals
Deferred installments (principal and interest) of existing personal and auto loans, mortgages, and credit cards will be arranged for up to three months for eligible customers until the end of June with no additional bank charges, the statement said.

Foreclosures on mortgages have been halted for defaulted customers until June 30 as well as a moratorium declared on the suspension of bank accounts for retrenched customers until the end of September this year.

Full refunds can be obtained on credit card processing fees on foreign currency transactions committed after January 1, associated with cancellation of travel plans.

Lastly, installment programmes will be made available with no service fees for utility bill payments until June 30.

However, for new personal and auto loans, mortgages and credit cards, individuals may defer installments (principal and interest) for up to three months until the end of June, along with a reduction of 50 per cent in associated bank charges.

A 50 per cent reduction on associated bank charges for eligible customers has also been announced until June 30, to encourage early settlements and refinancing of loans.

In addition, there will be a reduction in interest charges on new loans and credit cards for eligible customers based on new prevailing rates.

For school tuition fees, interest-free installment plans with be accorded with either a waiver of service charges or a zero per cent interest loan until the end of June.

Other measures include reducing the required down-payment by 5 per cent for first-time home buyers.

SMEs
Seven measures outlined in the package would enable SMEs to mobilise their borrowings and reduce the costs of running their businesses.

SMEs impacted by the outbreak may defer installments on existing borrowings for three months until the end of June with no additional bank charges.

Eligible SMEs will also be able to save on selected fees on their banking services such as bank merchant service fees (credit card transactions) which will be reduced by 50 per cent for businesses with below Dhs5m annual usage. This measure is available till June 30.

A reduction of up to 50 per cent on all banking fees and charges for Zero Balance accounts for eligible customers has also been announced.

In addition, the Minimum Average Balance requirements on all SME account categories will be reduced to up to Dhs10,000 per month to provide eligible customers with more liquidity.

Upon request to their banks, SMEs can defer installments on new borrowings for up to three months along with a 50 per cent reduction in any associated bank charges until the end of June 2020.

Eligible SMEs will also benefit from a reduction in interest charges on new borrowings based on new prevailing rates.

Lastly, businesses may avail a 50 per cent reduction in bank charges for early settlements on their existing borrowings until June 30.

All initiatives are subject to the banks’ respective credit approval processes for new loans.

The banks, namely FAB, ADIB and ADCB may design and implement additional initiatives as they deemed appropriate.

All the measures may be revisited and updated subject to the latest market conditions.