UAE - Mubasher: The board of the Central Bank of the UAE (CBUAE) has added more measures in the Targeted Economic Support Scheme (TESS) to enable the banking sector to support the economy amid coronavirus (COVID-19).
Under the new measures, the threshold of two prudential ratios, comprising the net stable funding ratio (NSFR) and the advances to stable resources ratio (ASRR), will be reviewed to ease the requirements for banks' structural liquidity position.
The relaxation of NSFR and ASRR, which ensure the funding of long-term assets by stable resources, will provide banks with flexibility in managing their balance sheets.
These measures will be applied to NSFR which is mandatory for the five largest UAE banks and ASRR which is applicable to all other banks, including foreign branches.
For both ratios, the mandatory threshold will be relaxed by 10% points.
As part of the changes that will be effective until 31 December 2021, banks will be allowed to go below the 100% threshold, but not lower than 90%, for the NSFR ratio.
As for the ASRR ratio, banks will be enabled to go above the 100% threshold, but not higher than 110%.
Commenting on the new measures, the governor of the CBUAE, Abdulhamid M. Saeed, said: "This measure will support the implementation of the already adopted TESS measures worth AED 256 billion."