During Pandemic, Private Bank Deposits in UAE rise in three months by $4.2 million
The latest data suggests that an increase of AED 15.6 billion cash landed in the private accounts in banks within a few months.
It has been revealed in a report by The UAE’s Central Bank of the UAE that this year, from April till June, savings being held in accounts in the private sector have increased to 1091.8 billion, which is an increase by 1.4% of last year’s 1076.2 billion.
The reason why there has been a steady growth in deposits is because of how the residents saved up during the pandemic. Due to the amount of uncertainty of the situation, people altered their spending patterns and therefore, started to save instead.
The UAE’s Central Bank says that households have become more careful due to the uncertainty of the virus and its impact.
In the UAE, consumer spending has dropped by a noticeable amount ever since the pandemic started. The most noticeable decline has been in the purchasing of beauty, bags, personal care, luxury goods, eyewear, footwear and apparel.
A survey conducted has concluded that almost 40% of people within the United Arab Emirates have had more cash reserves within the last few months. Consumers are bound to save more and spend less because of the given circumstances in the market.
Furthermore, banks have experienced a great influx of money within the accounts of the public sector. This is driven mostly because of the response of the government due to health outbreaks.
The UAE’s central bank believes that the government deposits have risen by AED 33.9 billion during the 2nd quarter of this year.
Emergency relief funds of billions of dollars have been generated and used for businesses to survive from the economic struggle caused because of the global pandemic. The banking system formulated a package which consisted of measures that are worth a 100 billion dirhams.
Moreover, The UAE’s Central Bank commented that the indicators of finance in the country are still stable for the second half of the year. This is supported by the TESS.
Furthermore, the amount of licensed banks on a commercial scale are also the same, though some payroll reductions and branch closures were experienced in the second quarter.
By the time the 2nd quarter ended, the number of operating bank branches in the country were 611, whereas in the 1st quarter, there were 640.
The UAE’s Central Bank says this is because of the digitalization of banking services. Also, the overall number of employees in banks also reduced to 35,423.