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The UAE Central Bank, in cooperation with the UAE Bankers Union and national banks, has launched a new national debt relief initiative called the Citizen Loans Program.
The idea of the program is to reschedule loans from citizens whose monthly premiums exceed 50% of salary and exceed four years, at Ibor's interest rate for three months or less.
The initiative aims to reduce the monthly deduction to 50% of the salary or 30% of the retired pension of retired citizens, and thus cancel the future benefits resulting from these loans, which do not exceed the price from Ibor for three months.
The program allows heavily indebted citizens to use additional amounts to repay their debt, which helps them repay their debts earlier and in installments not exceeding 50% of their income or 30% of their pension.
The program will cover consumer credit granted before May 2011 – personal loans, auto loans, overdraft facilities and existing credit card balances – but does not include mortgages, equity or deposit loans.
The beneficiary undertakes not to borrow or obtain credit facilities from banks and finance companies during the repayment period, and will authorize the relevant bank and the central bank to take any measure to ensure that 39, no loan or credit facility will be received during the repayment period.
The Central Bank has defined 4 main conditions for benefiting from the Citizen Loans Program:
– The applicant must be a citizen of the United Arab Emirates and have a fixed income.
– The applicant must have a personal consumption loan granted before May 2011, with a duration greater than 4 years, and a monthly deduction exceeding 50% of income. The loan will be contracted before December 2, 2018.
– The applicant agrees not to transfer the salary during the repayment period, provided that the loan is repayable in monthly installments of up to 50% of monthly income or 30% of retirees.
– The plaintiff undertakes not to borrow or obtain credit, including credit cards, from banks and finance companies during the repayment period.
The banks participating in the program will communicate with their customers and announce the start of receiving applications for the program from next April.
The central bank will closely monitor the application of loans to citizens and will work with banks to ensure the success of the program and will benefit before all those who qualify.
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