UAE central bank asks lenders to defer loan repayments for six months to help flood-hit residents

Roughly a year's worth of rain pummeled the Gulf country in a span of just 12 hours between April 16 and 17, destroying businesses, cars and other property.

Apr 23, 2024 - 21:07

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UAE central bank asks lenders to defer loan repayments for six months to help flood-hit residents

Cars are stranded on a flooded street in Dubai following heavy rains on April 18, 2024.

Giuseppe Cacace | AFP | Getty Images

The United Arab Emirates' central bank sent a directive to the country's lenders and insurers approving the deferring of loan repayments for six months, as residents and businesses reel from historic floods that paralyzed the normally dry desert emirate.

"The Central Bank today issued a notice to all banks and insurance companies to allow the deferral of repayment of instalments of personal and car loans for customers affected by the repercussions of the weather condition for a period of six months," the bank said in a Monday statement.

"The deferral shall be without imposing additional fees, interest or profits, or otherwise increase the principal amount of the loan for the deferral of the repayment of installments."

The notice will come as a relief to the many UAE residents who suffered losses and damages during the record-breaking storm. Roughly a year's worth of rain pummeled the Gulf country in a span of just 12 hours between April 16 and 17, destroying businesses, cars and other property.

A man steers his canoe on a flooded street in Dubai following heavy rains on April 18, 2024. Dubai's giant highways were clogged by flooding and its major airport was in chaos as the Middle East financial center remained gridlocked on April 18, a day after the heaviest rains on record.

Giuseppe Cacace | Afp | Getty Images

Hundreds of cars were left abandoned on UAE roads as drivers escaped flooded vehicles whose engines had died. One apartment building in Dubai has tilted over due to structural damage from the storm, and has been fully evacuated because it is in danger of collapsing.

Some parts of the UAE saw over 100 mm of rain between Tuesday and Wednesday — a 75-year record since the country started recording rainfall, according to the country's National Centre of Meteorology. The government on Tuesday shuttered offices, school and banks, as the National Emergency Crisis and Disaster Authority warned residents to stay home and park vehicles in elevated spots away from flood-prone areas.

The central bank also confirmed that homes and vehicles damaged by the flooding "are covered by insurance if there is an insurance policy against loss and damage or what is normally referred to as "comprehensive insurance," and that "the insurance companies shall be considered responsible for indemnification."

"The Central Bank urges the public to carefully read and comprehend the insurance policy to protect their insurance rights," it added, encouraging residents to contact the government's financial and insurance ombudsman, SANADAK, if they had any complaints or disputes with their insurance firm.