Over 40 UAE nationals will not be able to obtain loans and even credit cards any more as they benefited from a Presidential scheme under which loan defaulters are being bailed out through a Dh10-billion fund, the Central Bank of the UAE said on Wednesday.

Sultan bin Nasser Al Suwaidi, Governor of the Central Bank of the UAE, in the instructions issued through a circular, ordered banks and financial institutions in the country not to grant any loans to the beneficiaries of the Nationals’ Defaulted Debts Settlement Fund.

“You are asked not to grant any loans or credit facilities including credit cards to the beneficiaries of loans granted by the Nationals’ Defaulted Debts Settlement Fund,” the circular said.

The central bank’s “Banking Supervision Department shall periodically update the enclosed list by adding or deleting names to/from it and shall send the updated list in due course,” it added.

In January, the Nationals’ Defaulted Debts Settlement Fund with a kitty of Dh10 billion was setup by the President, His Highness Shaikh Khalifa bin Zayed Al Nahyan, to provide financial assistance to loan defaulters with limited incomes.

Initiative would benefit 6,800 UAE nationals, who defaulted on the personal loans of less than Dh1 million, be they in detention, pending trial or convicted, or settling their debts through instalment schedules set by the courts of law.

Those in prisons will be released and have their loans settled in accordance with specific settlement mechanisms, including deduction of 25 per cent from their monthly salaries, with undertakings not to borrow again until the loan is settled.

Shaikh Khalifa’s gesture follows the recommendation by the Supreme Committee of the Debts Settlement Fund for Citizens with Limited Income, chaired by Ahmad Juma Al Za’abi, Deputy Minister for Presidential Affairs.