The Central Bank's board has reviewed proposals "regarding settlement of personal consumer loans for the purpose of reducing debt burden of UAE nationals". Ryan Carter / The National
The Central Bank's board has reviewed proposals "regarding settlement of personal consumer loans for the purpose of reducing debt burden of UAE nationals". Ryan Carter / The National

UAE's Central Bank studies plan to help with loans



The Central Bank is weighing a raft of measures to help nationals struggling to pay back hefty bank loans.

The regulator's board reviewed proposals "regarding settlement of personal consumer loans for the purpose of reducing debt burden of UAE nationals", it said in a statement released after a meeting it held last week.

The move comes as the regulator steps up efforts to assist Emiratis struggling to repay bank loans.

In January, a presidential decree announced the settling of the personal loans of 6,830 Emiratis who were in default at the time. The loans, all less than Dh1 million (US$272,242) totalled about Dh2 billion.

As part of the deal, those Emiratis in prison for their debts were to be released from jail and will have their loans settled, according to a statement from the Wam news agency.

Exact details of how the latest deal will be funded have yet to emerge.

About Dh2bn was set aside by the Government to help indebted nationals at the time of January's presidential decree.

But banks are expected to share some of the burden, analysts believe.

Banks have historically been more willing to lend to nationals, offering them preferential borrowing rates and longer repayment periods, as they view them as a lower credit risk. As a result Emiratis have been able to borrow well in excess of their personal income.

But it is difficult to know exactly how indebted nationals are, relative to the expatriate population, because there is as yet no federal credit bureau.

During the same meeting, the board reviewed a report from officials on the health of the banking system. It "showed that banks are in a good position and should not be negatively impacted by the recent turmoil in international markets", the statement said.

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The rules on fostering in the UAE

A foster couple or family must:

  • be Muslim, Emirati and be residing in the UAE
  • not be younger than 25 years old
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  • A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
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