The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Saudi Arabia’s central bank is ordering lenders to provide concessional loans to businesses grappling with the fallout of the coronavirus so companies won’t have to cut jobs.
The Saudi Arabian Monetary Authority (Sama) wants banks to immediately put in place a lending program for at least six months to “assist in maintaining employment levels,†according to a document sent by the regulator to lenders and seen by Bloomberg. Banks should also provide relief on debt repayments for any customers that have already been dismissed, Sama, as the central bank is known, said in the circular.
The measures “will come at a cost to shareholders as banks’ revenue will be put under more pressure by the waivers on fees and some interest charges,†Bloomberg Intelligence analyst Edmond Christou said in a note.
Central banks around the world have unveiled emergency stimulus packages as the pandemic forces authorities to restrict international travel and go into full lockdown to slow the spread and prevent it from overwhelming health services. Saudi Arabia is the only G20 country that has responded to the economic impact of the virus by cutting spending.
Sama also unveiled a $13.3 billion program to help private businesses in the kingdom that’s also dealing with a crash in oil prices. Sama also postponed the implementation of outstanding Basel III standards to help banks respond to the coronavirus crisis.