NEWS HIGHLIGHTS
Dubai banks to offer relief packages to companies, individuals HH Sheikh Mohammed bin Rashid Al Maktoum, the Vice President and Prime Minister of the UAE and Ruler of Dubai has asked local banks to offer companies relief measures including refinancing and repayment referrals as part of measures to mitigate the impact of COVID-19 on the economy. The relief measures will prioritise key industries contributing to the UAE’s economy and sectors most impacted by the coronavirus such as health care, aviation, hospitality and retail. According to the Dubai Media Office, the measures announced by the banks seek to support the UAE Government and the Central Bank of the UAE’s six-month economic stimulus package as well as the Dubai Government’s three-month economic stimulus package to support businesses. The measures include offering refinancing, repayment deferrals or lower repayments where required. From 1 April until 30 June 2020, Dubai-based banks will waive loan repayments for three months for individuals on unpaid leave and small businesses. Dubai-based banks implementing these initiatives are Emirates NBD, Emirates Islamic, Dubai Islamic Bank, Mashreq Bank and Commercial Bank of Dubai. The banks will also reduce the minimum monthly balance for business accounts to AED 10,000 ($2,700).
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BANKER MIDDLE EAST | APRIL 2020 | ISSUE 229
UAE, Indian lenders face exposure to beleaguering Finablr Oman plans to trim budget, draft public debt law in response to COVID-19 Oman plans to reduce spending by five per cent in response to COVID-19 and the plunge in oil prices, a day after the Sultanate unveiled a $20 billion incentive package for financial institutions to combat the impact of the new coronavirus on the local economy, reported Bloomberg. The Sultanate is preparing a public debt law and is conducting a comprehensive review of public spending. Oman TV said that the government will conduct a budget review every three months to monitor adherence to spending limits. Oman has additionally approved funds to augment food reserves and to underwrite measures it’s taking to shore up the economy. The government did not say where the money is coming from, but Oman is planning on drawing on reserves and selling assets this year. The Central Bank of Oman said that it’s prepared to add OMR 8 billion ($20.8 billion) in liquidity as a buffer against the economic fallout from the virus, largely skirting a budget that is been battered by the crash in oil prices.
Banks from the UAE and India risk losing millions of dollars due to their exposure to London Stock Exchange-listed Finablr, the foreign-exchange operator that is preparing for potential insolvency, reported Bloomberg. The firm has been hurt by a liquidity squeeze at both group and operational business level as well as the fallout from NMC Health, coronavirus-related travel restrictions and a downgrade of Travelex’s bonds. UAE-based National Bank of Fujairah and Commercial Bank International and India’s Bank of Baroda are still owed about $300 million by Finablr’s parent BRS Ventures, which is owned by Bavaguthu Raghuram Shetty. The loan was used to refinance a bridge loan for the acquisition of Travelex Holdings. BR Shetty pledged around 56 per cent of his shares in the firm as collateral for the loan when he was unable to repay it after Finablr’s initial public offering (IPO) last May 2019. Since listing in London, the shares have plummeted about 93 per cent, giving Finablr a market value of GBP 77 million ($89 million) when it was halted from trading last week that is down from a peak of GBP 1.5 billion in December 2019.
