Dubai Banks are getting on board with the Debts Settlement Fund, an initiative launched by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan on the UAE's 40th anniversary to waive the loans of Emirati defaulters.
Finance House is one of the latest to join the initiative.
During its annual general meeting yesterday, Mohammad Abdullah Al Qubaisi, chairman of Finance House, announced the company's plans to sign an agreement with the Debts Settlements Fund.
"The initiative of His Highness Shaikh Khalifa will help a large number of such people who can not pay back their loans due to various reasons and we will also join this wonderful exercise to bail them out from their financial debt lock-in," said Al Qubaisi.
One international bank and seven local banks have signed a Memorandum of Understanding (MoU) under which they will waive 50 per cent of the UAE nationals' loans.
The banks include the National Bank of Abu Dhabi, Abu Dhabi Islamic Bank, Abu Dhabi Commercial Bank, Union National Bank, National Bank of Ras Al Khaimah, Standard Chartered Bank and Mashreq Bank, the news agency WAM reported.
The initiative aims to settle the personal loans of less than Dh1 million for UAE citizens who are currently in detention, pending trial or convicted because of their debts.
Banks will settle their debts through installment schedules determined by the courts.
Those who are in prison will be released and have their loans settled in accordance with specific settlement mechanisms, including deduction of 25 per cent from their monthly salaries, with undertakings not to borrow again until the loan is settled.
A Dh10 billion fund called the ‘Citizens' Debt Settlement Fund' was set up through the decree issued by Shaikh Khalifa to ease the burden on around 6,830 citizens who have low incomes.
Shaikh Khalifa's gesture follows the recommendation submitted to him by the Supreme Committee of the Debts Settlement Fund for Citizens with Limited Income, chaired by Ahmad Juma Al Za'abi, Deputy Minister of Presidential Affairs.
"The fund is a non-profit making organisation and has been established to address the issues pertaining to UAE nationals' bank debts," said Al Za'abi.