Abu Dhabi: The UAE Central Bank has taken a number of measures to help citizens solve their financial burdens, signing Memoranda of Understanding with four banks to take the number of financial institutions and companies joining the government’s initiative to settle citizens’ cheque defaulting issues to 17.

Abdullah Al Hamiz, Central Bank of the UAE assistant governor for banking supervision, told Gulf News that Sharjah Islamic Bank, HSBC, Noor Islamic Bank and the Arab Bank for Investment and Foreign Trade were the latest to join the list.

“Banks should shoulder a social responsibility and should contribute to the community by alleviating the suffering of those defaulted clients,” said Al Hamiz.

“There is no win-win situation and banks should cooperate with the Central Bank and the government to solve this issue, stemming from the principle that they are not just financial firms but rather they have social role to play.”

Mohammad Al Rumeithi, Undersecretary of the Ministry of Presidential Affairs and deputy head of the Supreme Committee of the Debts Settlement Fund for Citizens, told Gulf News that the number of defaulters, as of the end of December 2012, was 6,500 citizens whose total debts are Dh2 billion.

“We have settled the conditions of 450 citizens so far whose defaulted amounts are Dh300 million in total,” Al Rumeithi added.

Last year, His Highness Shaikh Khalifah Bin Zayed Al Nahyan, President of the UAE, Supreme Commander of the UAE Armed Forces and Ruler of Abu

Dhabi, ordered the establishment of a Dh10 billion fund to settle the defaulting personal loans of citizens “be they in detention, pending trial or convicted, or settling their debts through instalment schedules set by the courts”.

Al Rumiethi added: “I would like to thank HH Shaikh Khalifa Bin Zayed Al Nahyan for taking such a big step. This will indeed prove to be very beneficial for citizens who are struggling to pay their debts as well as their families, who are bearing the brunt of it.”

He pointed out the committee and the Central Bank of the UAE discussed measures to alleviate the debt burdens of UAE nationals with a number of banks.

Minister of Presidential Affairs and chairman of the commission in charge of settling citizens’ bad debts, Ahmad Juma Al Zaabi, had earlier said that 332 citizens were released following cases of bounced security cheques.

Al Zaabi said that these cheques are “swords on the necks of borrowers which lead to prison in the case of defaults regardless of the amount being paid.”

He blamed the banks for giving cheque books to citizens whose salaries are less than Dh10,000 per month.

Al Zaabi explained that the commission had asked the central bank to investigate some irregularities carried out by some banks that violate the laws by lending the citizens more than their salaries.

Al Zaabi said that citizens’ total personal non-commercial loans amounted to Dh70 billion, reflecting the magnitude of the issue and its complexity.

He stressed that there should be an orientation and awareness campaign about the dangers of debt and the potential pitfalls involved in taking out loans.

On November 10, HH Shaikh Khalifa issued a decree with regard to cases of security cheques filed by banks and financial companies against Emirati citizens to release all those citizens who were imprisoned because of these cheques.

Ali Khalfan, director of the legal department at the ministry of presidential affairs, said that the number of those released in cheque cases was 127.

“In cheque cases, the number of those released was 83 in Abu Dhabi, 24 in Dubai, 5 in Sharjah, 1 in Ajman, 11 in Ras Al Khaimah and 3 in Fujairah,” said Al Khalfan. “The amount settled for these citizens amounted to Dh122.6 million in cases with banks and companies.”