UAE to deposit additional $6.8bn with local banks

06 November 2008
The UAE Finance Ministry has announced it will begin distributing AED25bn ($6.8bn) to local banks from 9 November, as part of its efforts to shore up confidence in its banking system and stimulate lending.

The deposits are a follow-up to the first AED25bn that was put on deposit in local banks in late October.

The funds are for the purposes of “trade-related finance facilities and loans to businessmen and basic infrastructure developers,” said the ministry.

“After its completion of paying the first tranche of the banking support facility declared by the government, it is now in the process of paying the second tranche of AED25bn, with effect from next week,” added the ministry.

The amount deposited at each bank is determined by their asset size.

A total of AED70bn has been earmarked by the government to put on deposit with local banks to help alleviate a shortfall in liquidity and a mismatch between loan growth and deposit growth.

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