A group of banks in the United Arab Emirates are offering a plan under which they would suspend legal action against small- and medium-sized businesses struggling to repay loans for up to three months amid a Gulf-wide economic slowdown.

The plan was offered Monday by the UAE Banks Federation, a group of the country's 49 top banks. The banks say they are seeing a spike in loan defaults as crude oil prices have dropped drastically in recent months.

The plan will allow businesses to restructure their loans and work with banks to repay their debts.

Failure to repay debts in the UAE and elsewhere in the Gulf often results in prosecution, causing some individuals to try to flee when they default.