(MENAFN - Khaleej Times) The UAE Banks Federation, or UBF, on Monday reaffirmed its full support for the government's initiative to reduce the serious debt burden being experienced by some Emiratis.
Last week, the Office of the Presidential Affairs warned that banks in the UAE were obliged to write off 50 per cent of debts owed by Emiratis in line with the Debts Settlement Fund initiative or face punitive action.
The UBF, a professional representative body representing 50 member banks operating in the UAE, in a statement, urged its member banks to cooperate in the scheme and said it would continue to coordinate with its member banks to support this important national initiative.
For the past 12 months, the UBF has been encouraging all members to focus on promoting financial literacy and responsibility programmes, which will help to prevent such indebtedness recurring in the future.
The UBF thanked those member banks that had assisted debt-burdened nationals and urged all the other banks to support the move.
The Debts Settlement Fund was setup in 2012 to assist Emiratis steeped in personal debt. The fund requires banks to waive half of what they are owed by UAE citizens, with the other half settled though a Dh10 billion fund. Those banks that do not take part will be named and shamed by the UAE Central Bank, and potentially be placed on a government blacklist.
Ahmed Jumma Al Za'abi, Deputy Minister of Presidential Affairs and Chairman of the Debts Fund, warned last week that those banks that do not support Emiratis to get their heavy debts cleared under the programme initiated by the President, His Highness Shaikh Khalifa bin Zayed Al Nahyan, would be penalised.
Al Za'abi said the fund has so far helped 2,700 Emiratis by clearing debts of over Dh1.8 billion with the support of banks. There are still 3,300 applications pending.
The minister said more than 50 per cent of the banks operating in the country has been very helpful by extending concession to help clear the loans of Emiratis. "However, some banks have been little helpful. If we don't see any cooperation from these banks, action will be taken against them," Al Za'abi said.
In line with the debt relief programme, all criminal cases pending in connection with bounced cheques and non-repayment of loans by Emiratis have been suspended and debts cleared.