UAE central bank rolls out resilience package to support banks
The CBUAE approved a five-pillar support package that expands liquidity access, relaxes select prudential requirements, and signals banks should keep financing the economy under stress.
Reuters reported that the UAE central bank approved the package on March 17 as the regional crisis entered a third week and disrupted energy and transport markets. The CBUAE board said the UAE financial system “has demonstrated resilience” during current extraordinary conditions “without any material impact” on banking-sector health and payment systems. The board met in Abu Dhabi under Sheikh Mansour bin Zayed Al Nahyan, who chairs the central bank’s board, and approved what it called a comprehensive Financial Institution Resilience Package . The UAE’s enduring financial and economic strength is rooted in the forward-looking vision of the UAE’s leadership. What the resilience package changes for banks and borrowers The CBUAE designed the package around five pillars and positioned it as a set of policy levers, not a single headline funding amount. The package includes the following pillars: Monetary policy measures: Banks can access reserve balances up to 30% of the cash reserve requirement, and the central bank will offer term liquidity facilities in both AED and USD. Liquidity and funding relief: The CBUAE will grant temporary relief in liquidity and stable funding ratios to give banks more flexibility to support the economy. Capital buffer relief: The CBUAE will temporarily release the countercyclical capital buffer and the capital conservation buffer. Credit risk management flexibility: Banks can postpone the classification of individual and corporate loans for customers affected by current conditions. Additional support: The central bank said banks should continue providing financing services that support customers and the national economy. In practical terms, the measures aim to prevent a liquidity squeeze from turning into a credit crunch, especially if funding or deposit conditions tighten during the crisis. UAE banks enter the shock with large liquidity and capital cushions The central bank’s own figures show why officials believe the system can absorb stres