2 billion Dhs debt 'wiped out'

Chocoholic

Well not as good as it sounds, as they still have to hand over 25% of their earnings and not borrow again until it's all paid back. The last statement shocked me, in that Emiratis are responsible for more than a quarter of the total amount provided by UAE banks.

So bang goes the 'illusion' to many that all locals are rolling in it. They're all hard up by the looks of things.

http://www.7days.ae/article/news/national/dhs2-billion-debt-wiped-out-32532

It's a great gesture and will be a steep learning curve for many. Now they need to sort the expats out and come into the real world with regards to lending, being flexible etc. How many banks have now gone bust? I've lost count.

Dillon

A lot of local families are finding their DEWA bills a bit of a shock as well now they have to pay at the same rates as everybody else, have you noticed all the dead gardens around now and destitute gardeners?

😂 😂

Chocoholic

Dillon , Oh I totally forgot about that? Maybe maids will stop watering the driveways as well!

Bora_Bora

Their jobs are still there for them? 🙄 I guess they work for the government. :bounce: So all it takes is a promise not to borrow again?

I don't know if banks still do it but I remember where an expat could get a loan equal to 2X their salary and locals were getting 5X (maybe 10X) and they were taking loans out from multiple banks. If it's still a practice that needs to stop as well. This is where a "credit bureau" needs to be put in place to enable all banks to check if a person has outstanding loans or, in this case, put a block on anyone who is repaying debt.

You will be reading about this again in a few years time. Wash, rinse, repeat.

shafique

The article is a bit confusing - if the debts are to be still paid off by 25% of salary, then they haven't been wiped out, just transferred to the 'state' - unless I'm misunderstanding the explanation.

Regardless, it does go to show that the fundamentals always apply - debt for consumption (rather than investment) should be done within one's earning capacity. When it doesn't, it ends in tears. Applies to individuals and companies and states.

Cheers,

Shafique

benwj

shafique ,

They will basically have an interest free loan. I doubt that they will pay the loans off anyway as it will cost the govt more to keep chasing them and keeping records than to just forget about it.

shafique

Benwj - that makes sense. But as the interest free loan is now with the state, the debt has been transferred and not wiped out (I presume the banks will be paid by the state to 'wipe out' the bank loan). You may be right about payments - but given that it will be taken from salaries, it appears they want it paid back.

Cheers,

Shafique

benwj

The govt is cashed up and would otherwsie be spending the money on fast cars and women, so it isn't really a debt to them.

shafique

😀

I guess it is a bit like the EU bailing out the bankers who lent money to Greece - only here it is the UAE banks who lent the money to Emiratis. 😉

Cheers,

Shafique

Chocoholic

I guess they just want them out of prison and back working. Bora, I've heard banks making stupid adverts recently take out a loan of xxxx amount and get a free car - so they're already back to that again.