Abu Dhabi banks unveil financial initiatives for consumers, SMEs

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Jeddah - Yasmine El Tohamy - DUBAI: Several Abu Dhabi banks will implement a comprehensive package of financial incentives to help consumers and businesses in the emirate cope with the economic uncertainties because of the coronavirus outbreak.

Designed to provide for the immediate needs of individuals and small to medium-sized enterprises (SMEs) in Abu Dhabi, these 17 financial initiatives seek to reduce finance-related costs, facilitate the ease of access to financing, and maintain the resilience of the Abu Dhabi economy, state news agency WAM reported.

The measures, a collective effort by First Abu Dhabi Bank, Abu Dhabi Islamic Bank, Abu Dhabi Commercial Bank and the Abu Dhabi government, include 10 banking-related initiatives specifically for individuals, and seven financial initiatives for SMEs.

“Individuals who are impacted by COVID-19 may obtain these benefits, upon request to their banks. Deferred instalments (principal and interest) of existing personal and auto loans, mortgages, and credit cards will be made available for up to three months for eligible customers until the end of June 2020 with no additional bank charges,” WAM said.

“Foreclosures on mortgages will be halted for defaulted customers until 30 June 2020 and there will be a halt in the suspension of bank accounts for retrenched customers until the end of September 2020. Full refunds can be obtained on credit card processing fees on foreign currency transactions committed after 1 January 2020, associated with cancellation of travel plans.

“Lastly, instalment programs will be made available with no service fees for utility bill payments until 30 June 2020.

“All individuals, upon request to their banks, may defer instalments (principal and interest) on new personal and auto loans, mortgages, and credit cards for up to three months for eligible customers until the end of June 2020, along with a reduction of 50 percent in associated bank charges,” WAM reported.

And to encourage customers to avail of an early settlement and refinancing of existing loans, banks would be implementing a 50 percent reduction on associated bank charges for eligible customers until June 30, 2020. There will also 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 instalment plans with either a waiver of service charges or 0 percent interest loan will also be provided until the end of June 2020. Other measures announced also include reducing the required down-payment by 5 percent for first-time home buyers,” the WAM report said.

For small businesses, the financial incentives geared for them would enable SMEs to mobilize their borrowings and savings more efficiently, while reducing the financial costs of running their businesses, WAM said.

“For those SMEs who have been impacted by COVID-19, upon request to their banks, they may defer instalments on existing borrowings for three months for eligible customers until the end of June 2020 with no additional bank charges.

“Eligible SMEs will also be able to save on selected fees for their banking services. Specifically, bank merchant service fees (credit card transactions) will be reduced by 50 percent for SMEs with below 5 million dirhams usage per annum until June 30. There will also be reduction of up to 50 percent on all banking fees and charges for Zero Balance accounts for eligible customers.

“In addition, the Minimum Average Balance requirements on all SME account categories will be reduced to up to AED 10,000 per month for eligible customers to provide them with more liquidity,” WAM said.

SMEs may also request their banks for instalments to be deferred on new borrowings for up to three months along with a 50 percent reduction in any associated bank charges until the end of June 2020, while those eligible could benefit from a reduction of interest charges on new borrowings based on new prevailing rates.

“Lastly, SMEs may avail a 50 percent reduction in bank charges for early settlements on their existing borrowings until June 30,” WAM said.

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