IslamicFinance.de

The UAE's Debt Settlement Fund was set up to rescue Emiratis struggling to meet payments on loans and credit cards. It was launched with an initial budget of Dh10 billion. Heavily indebted Emiratis who receive help by the fund are not allowed to borrow from any banks and their name is centralised in all banks. All banks are required to cooperate, and uncooperative institutions will face penalties. Under the auspices of the agreement, the bank writes off half the outstanding amount of the debt, which must be in dispute. However, in turn, the bank gets closure on a debt that is stuck in litigation. However, only Emiratis who have been taken to court by a bank on account of default as of the date of the launch of the initiative in 2011, qualify for the programme.