(Source: Haseeb Haider Khaleej Times, Dubai, United Arab Emirates (MCT) -- Dissatisfied with the higher levels of proposed monthly installments which would be deducted from the salaries of Emirati loan defaulters, under the debt settlementinitiative designed to bail them out from a debt trap, the UAE Central Bank is seeking appropriate solutions.
The board of directors of the central bank, which met here last week, reviewed data on the personal loans of UAE nationals submitted to it for study.
The board said in a statement that it considered “several options to find appropriate solutions for these loans and noted that the monthly installments deducted from the monthly salaries of UAE nationals towards repayment of these loans are rather high”.
With a view to alleviating the financial burden on UAE nationals, the board instructed further study and more cooperation and coordination with all agencies concerned in order to find appropriate solutions which would alleviate the burden of these loans on UAE nationals, the statement said.
Instructions were issued for preparing “appropriate recommendations” in this respect which will be forwarded to higher authorities.
On January 26, the President, His Highness Shaikh Khalifa bin Zayed Al Nahyan, set up a Dh10 billion fund to ease the financial burden on Emiratis who are in a debt trap, as many are facing legal action by the banks.
The initiative would benefit 6,800 UAE national defaulters of personal loans of less than Dh1 million, be they in detention, pending trial or convicted, or settling their debts through installment schedules set by the courts of law.
Under the package, those in prisons will be released and have their loans settled in accordance with specific settlement mechanisms, including deduction of 25 per cent from their monthly salaries, with undertakings not to borrow again until the loan is settled.
Shaikh Khalifa’s initiative follows a recommendation by the Supreme Committee of the Debts Settlement Fund for Citizens with Limited Income.
Till now, about 10 financial institutions have signed agreements with the Debt Settlement Fund in order to implement the initiative. They include Emirates NBD, National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, Union National Bank, First Gulf Bank, Abu Dhabi Islamic Bank, Mashriq Bank and HSBC.
The board also reviewed applications submitted by banks operating in the UAE to expand their businesses and open new branches, and applications to establish companies/ establishments to undertake financial activities and money changing businesses. The board approved applications that fulfilled terms under the laws and regulations applied to such business activity.