The “support package” is a proactive measure that strengthens the banking sector

Officials in the banking sector confirmed that the comprehensive proactive support package recently approved by the Board of Directors of the UAE Central Bank reflects the bank’s proactive approach, with the aim of enhancing flexibility and consolidating the stability and strength of the banking sector in the country.

The Emirates Banking Federation said that the comprehensive proactive support package approved by the Board of Directors of the Central Bank of the Emirates, headed by His Highness Sheikh Mansour bin Zayed Al Nahyan, Vice President of the State, Deputy Prime Minister, Head of the Presidential Court and Chairman of the Board of Directors of the Central Bank of the Emirates, comes as a reflection of the proactive approach of the Central Bank, with the aim of enhancing flexibility, and consolidating the stability and strength of the banking sector in the country, in light of the exceptional circumstances witnessed by the region and the global economy.

Chairman of the Board of Directors of the UAE Banks Federation, Abdulaziz Al Ghurair, said that this step confirms the vision of the wise leadership of the UAE and the proactive approach of the UAE Central Bank, which is keen to build strategies, policies and frameworks to ensure the stability of the banking and financial sector, and that it carries out its assigned role in economic and social development, and achieve the strategic priorities of the UAE.

Al Ghurair added: “This proactive package from the UAE Central Bank contributes to enhancing flexibility, adapting to changes, and continuing growth, as the five pillars of the support package provide additional flexibility to financial and banking institutions in using surplus liquidity and capital reserves and supporting customers in these exceptional circumstances, which contributes to strengthening the national economy.”

For his part, Osama Al Rahma, Chairman of the Board of Directors of the Banking and Financial Transfer Institutions Group and Head of Business Development at the Emirates Investment Bank, said that what was reviewed by the Board of Directors of the Central Bank of the Emirates clearly embodies the depth of the strategic vision of the UAE and its exceptional ability to anticipate challenges and turn them into opportunities that enhance its global financial leadership.

Al Rahma stressed that the strength of the country’s financial and banking system, supported by reserves exceeding one trillion dirhams, reflects a solid institutional approach based on long-term strategic planning, efficient monetary policy management, and high flexibility in dealing with regional and international variables, pointing out that these indicators are not the result of the moment, but rather the cumulative result of integrated national strategies.

He added that the proactive support package adopted by the Central Bank represents a qualitative step that enhances the ability of financial institutions to continue their vital role in supporting the national economy, especially in light of the exceptional circumstances the world is witnessing, noting that the multiple axes of the package reflect the comprehensiveness of the vision and the state’s keenness to ensure the sustainability of economic growth and protect its gains.

Al Rahma explained that the UAE, thanks to its wise leadership, continues to consolidate its position as a global financial center enjoying the highest levels of confidence and stability, pointing out that the readiness of the banking sector and high liquidity enhance its ability to support various economic sectors efficiently.

In the same context, Abu Dhabi Islamic Bank Group CEO, Mohammed Abdel-Bari, said: “The precautionary measures adopted by the UAE Central Bank reflect a proactive approach that enhances the stability and strength of the financial and banking system in the UAE, in light of the current global and regional changes.”

He added: “These measures confirm the strength of the foundations on which the banking sector in the UAE is based, supported by high levels of liquidity, strong capital rules, and a solid regulatory framework. It also contributes to enhancing the flexibility of financial institutions and enabling them to continue performing their role in supporting economic activity and maintaining financial stability.”

He stressed that these steps embody the commitment of the concerned authorities to always be prepared to take the necessary proactive measures and tools to maintain the stability of the financial system and enhance confidence in it in various circumstances, reiterating Abu Dhabi Islamic’s full commitment to comply with the directions of the Central Bank of the Emirates, and to continue working closely with the regulatory authorities and the banking sector to support the national economy and consolidate financial stability.

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Continue to provide financing and facilities

The package includes five main axes that allow banks to access cash liquidity, and provide them with additional flexibility to use surplus liquidity and capital reserves, in a way that contributes to supporting the UAE’s economy. These axes are: enhancing access to reserve balances up to 30% of the mandatory reserve requirements, providing forward liquidity facilities in dirhams and US dollars, and temporarily reducing liquidity ratios and stable financing ratios, to give banks greater flexibility to support the economy, and reducing cyclical fluctuation buffers and capital protection buffers. (CCB) to support the economy.

The fourth axis is to give banks flexibility to postpone the classification of the debts of individuals and companies to provide temporary facilities to customers in the banking sector affected by the exceptional circumstances, while the fifth axis is the Central Bank’s emphasis on the need for banks to continue providing the necessary financing services to support customers and the national economy.