UAE banks hailed the bankruptcy law introduced recently, saying it will bring benefits to the financial sector in the country.
The banks discussed the law at a meeting yesterday of the Advisory Council of the UAE Banks Federation, the professional body representing 49 banks in the UAE.
A statement said the main topics discussed were the legislation of a UAE bankruptcy law, as well as progress made by the “modus operandi” (which was launched by the Federation earlier in the year) to support SMEs, among other vital topics. The meeting was chaired by HE Abdulaziz Al Ghurair, Chairman of the Federation.
“The Council 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,” the statement said.
“They recognised the linkage between this development and the modus operandi formally initiated by the Federation earlier in the year by which lenders to SMEs experiencing repayment difficulties agree to a process to enable the companies to reschedule their debt and continue business as usual.”
Al Ghurair, Chairman of the UAE Banks Federation, commented: “We commend and welcome the legislation of 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.”
He said that 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 per cent of the country’s non-government GDP.
He added that through UBF’s SMEs rescue initiative, the “Modus Operandi”, banks were able to put in place a total figure of Dh7 billion of outstanding loans for more than 1700 SMEs and Corporates, restructured and under negotiation to restructure.
“Our meeting also focused on other areas in which we can make a contribution for the same objective – namely to help build as strong and resilient an economy for the UAE as possible,” the statement said.