|By Arabian Post Staff|Up to AED 7 billion in outstanding loans were restructured by UAE banks through negotiations with over 1700 small and medium enterprises in distress, the UAE Banks Federation has revealed.
The restructuring was done under an initiative of the Federation named “Modus Operandi”. The initiative was launched by the Federation earlier in the year under which lenders to SMEs experiencing repayment difficulties agree to a process to enable the companies to reschedule their debt and continue business as usual.
This is part of the banks’ efforts to focus on areas where they can make a contribution in helping build a strong and resilient economy for the UAE, UBF chairman Abdul Aziz Al Ghurair said.
The CEO Advisory Council of the UAE Banks Federation, the professional body representing 49 banks in the UAE, yesterday discussed a number of high priority topics impacting the UAE’s banking sector. Top agenda items included the legislation of a UAE bankruptcy law, as well as progress made by the “modus operandi”.
The CEOs welcomed the progress made in bringing the bankruptcy law into force, and recognised the mutual benefit it will bring both to banks and owners of businesses especially SMEs. They recognised the linkage between this development and the federation’s own “modus operandi” initiative.
Members of the Council acknowledged the significance of the SME sector to the UAE economy and noted the important role that bankruptcy law is playing in other dynamic economies around the world. They also recognised that the existence of a bankruptcy law is a critical factor in both stimulating new entrants to the SME sector, as well as inward investment from overseas.
Federation chairman Abdulaziz Al Ghurair said the federation welcomed the bankruptcy law, which the government has recognised as a pre-requisite to the country’s future economic development, and as an essential tool to maintain the well-being of the business and environment economy. All banks were involved and responsible to consider every option to support their clients, and help them stay in business and succeed, especially SMEs which represent over 90% of the country’s non-government GDP, he pointed out.
