The central bank of the United Arab Emirates (UAE) announced on Saturday a 100 billion dirham ($27 billion) economic plan aimed at containing the impact of the coronavirus outbreak.
The central bank said it will provide 50 billion dirhams through collateralized loans at zero cost to all banks operating in the UAE while an additional 50 billion dirhams will be freed up from banks' capital buffers.
"The CBUAE is allowing banks to free-up their regulatory capital buffers to boost lending capacity and support the UAE economy," it said in a statement.
The central bank said the scheme was to offer banks temporary relief from the payments of principal and interest on outstanding loans for affected private sector companies and retail customers.
"Participating banks should use the funding to grant temporary relief to private sector corporate customers and retail clients for a period of up to six months," it said, Reuters reported.
Other measures introduced by the regulator include reducing by 15-25% the amount of capital that banks have to hold for their loans to small and medium enterprises, and better terms for first-time home buyers, who will be required to put up less of their own capital for real estate purchases.
It also introduced regulations that reduce banking fees for small companies.
