UAE Central Bank Approves Financial Institution Resilience Package

The Central Bank of the UAE has approved a comprehensive financial institution resilience package aimed at safeguarding the country’s financial system amid ongoing regional conflict.

According to state news agency Wam, the initiative is designed to reinforce stability while ensuring that banks can continue to support economic activity during a period of heightened uncertainty.

At the core of the package is enhanced access to liquidity. Banks will be able to tap into additional funds and utilise excess liquidity more flexibly to sustain lending and financial operations across the UAE economy.

The five-pillar plan introduces several key measures, including allowing banks to access reserve balances of up to 30 per cent of their cash reserve requirements. It also provides for term liquidity facilities in both UAE dirhams (AED) and US dollars (USD), offering institutions greater financial flexibility.

In addition, the regulator has introduced temporary relief measures related to liquidity and stable funding ratios. Capital buffers will also be temporarily released, enabling banks to better absorb financial pressures during the current environment.

Further easing regulatory requirements, the Central Bank has granted flexibility for banks to postpone the classification of individual and corporate loans for customers affected by the situation. This move is expected to provide relief to both businesses and individuals facing financial strain.

“In view of the extraordinary circumstances, and considering the aforementioned support, the CBUAE affirms that banks should continue to provide the required financing services to support their customers and the national economy,” the regulator stated.

The resilience package highlights the UAE’s proactive approach to maintaining financial stability and ensuring continued economic support during a challenging period.