The economic support plan achieves its main objectives

The Central Bank: A recovery in credit... a strong growth in deposits... and a sufficient amount of liquidity reserves

Khaled Muhammad Balama: “The recovery, stability and resilience of the banking sector, which is reflected in the current financial indicators, is a cause for reassurance.”

The Governor of the Central Bank of the Emirates, Khaled Muhammad Balama, met yesterday with the CEOs of banks operating in the UAE, to discuss the continuous recovery witnessed by the banking sector in the country, the increasing role of digitization in enhancing the resilience of the financial sector, and Emiratisation initiatives in the sector.

Recent indicators confirm the recovery of the banking sector and its return to pre-Covid-19 levels, including a recovery in credit in general, strong growth in bank deposits and an adequate amount of liquidity and funding reserves.

recovery and stability

Balama said that the recovery, stability and flexibility of the banking sector, which is reflected in the current financial indicators, is a cause for reassurance, stressing the Central Bank's keenness to respond to the rapid developments imposed by the "Covid-19" pandemic, by exercising a leadership role in implementing large-scale, unprecedented support measures in extreme circumstances. The difficulty, which led to facilitating the recovery of the banking sector, and thus the central bank’s comprehensive targeted economic support plan has achieved its main objectives, at a time when the bank will continue to monitor the financial situation, and will maintain precautionary support measures during 2022.

He added: “The Central Bank aims to accelerate the development of the financial sector in the country, through a comprehensive digital transformation program, and further improvement of national payment systems, which will include the instant payment platform.

We will work side by side with the CEOs of banks to strengthen the banking sector in the country, develop a world-class financial infrastructure, and implement initiatives aimed at promoting Emiratisation and increasing the participation of national cadres in the banking and insurance sectors.”

The second phase

According to the Central Bank, the support plan launched by the Central Bank contributed to supporting the UAE banking system during this period, which made it possible to complete the second phase of the plan by the end of June 2022.

The aforementioned second phase includes measures regarding capital reserve requirements, liquidity and requirements for banks' stable funding sources.

As a precautionary measure, the Central Bank decided to keep the third and final phase of the support plan until the end of the second half of 2022, including the reduced mandatory reserve requirements.

digital transformation

During the meeting, the participants discussed the Central Bank's plan to develop financial infrastructure and digital transformation, which aims to achieve more financial inclusion, contribute to the development of the national digital economy, and improve the experience of dealers in financial services through the application of innovative digital solutions.

The Central Bank also provided the meeting participants with an update on the implementation of the "National Payment Systems Strategy", which includes the instant payment platform, and an accelerated modernization of the financial infrastructure and payment systems data centers.

Emiratisation rates

The Central Bank presented a summary of a wide range of initiatives to increase Emiratisation rates in the financial sector.

These initiatives aim to create 5,000 jobs in the banking and insurance sectors, by the end of 2026. The Central Bank, through the Emirates Institute for Banking and Financial Studies, will provide training plans directed to meet the needs of the labor market, future employment requirements for the banking sector, attract and develop national competencies, as well as upgrading With the skills of Emirati cadres currently working in the sector.

The Central Bank decides to keep the last stage of the support plan until the end of the second half of 2022.

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