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125212
Mon, 05/31/2010 - 14:31
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https://oananews.org//node/125212
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Banks adopt strict new credit card rules
Abu Dhabi, May 31, 2010 (WAM) -Banks in the UAE have started adopting stringent measures for issuing new cards, after defaults touched an all-time high by the end of 2009.
The measures – adopted by both domestic and international banks – include increase in minimum salary requirements; restricted industry segments; company profile; job profile; and the tenure of service, among others. After this, the application goes for an internal scrutiny and verification process, depending upon the revised credit policy of the bank concerned.
Once qualified as a customer, the bank will issue the card for free, whereas earlier it used to be free.
Confirming this move, Navneet Dave, Head of Cards, National Bank of Abu Dhabi, told Emirates Business: "Banks have become more cautious while issuing new cards. They have started charging fees once again for the new cards. Definitely, there has been a significant increase in minimum salary requirements for issuing new cards. Also, the verification process [looks into] the type of company you are working for, the length of service etc." There is a restriction on issuing cards to people from industry segments such as construction and real estate, he said.
Echoing this, Philip Byrne, Global Business Manager, Credit Cards, Arab Bank, said: "There has been a lot of consolidation in the market. It has been a tough year for all credit card providers, because of the high proportion of credit card skips. In the event of [a] customer going bad, you can't recover [any money] from him. So banks have adopted stringent measures, including increasing the eligibility criteria, for getting new cards.
"Most banks have increased the minimum salary requirement by at least 20 per cent for new card issuances. They are now looking at length of employment, type of employment, segments and duration [of stay] in the UAE for issuing new cards.
"International banks can be lenient in issuing cards to expatriates because of their global reach [of recovery], but local banks will have to be stringent while issuing cards to people of different nationalities."
Global banks like HSBC require a minimum gross salary of Dh20,000 per month for HSBC platinum or gold cards, while most local banks require a gross salary of Dh10,000 for their credit cards. – Emirates Business 24|7
The measures – adopted by both domestic and international banks – include increase in minimum salary requirements; restricted industry segments; company profile; job profile; and the tenure of service, among others. After this, the application goes for an internal scrutiny and verification process, depending upon the revised credit policy of the bank concerned.
Once qualified as a customer, the bank will issue the card for free, whereas earlier it used to be free.
Confirming this move, Navneet Dave, Head of Cards, National Bank of Abu Dhabi, told Emirates Business: "Banks have become more cautious while issuing new cards. They have started charging fees once again for the new cards. Definitely, there has been a significant increase in minimum salary requirements for issuing new cards. Also, the verification process [looks into] the type of company you are working for, the length of service etc." There is a restriction on issuing cards to people from industry segments such as construction and real estate, he said.
Echoing this, Philip Byrne, Global Business Manager, Credit Cards, Arab Bank, said: "There has been a lot of consolidation in the market. It has been a tough year for all credit card providers, because of the high proportion of credit card skips. In the event of [a] customer going bad, you can't recover [any money] from him. So banks have adopted stringent measures, including increasing the eligibility criteria, for getting new cards.
"Most banks have increased the minimum salary requirement by at least 20 per cent for new card issuances. They are now looking at length of employment, type of employment, segments and duration [of stay] in the UAE for issuing new cards.
"International banks can be lenient in issuing cards to expatriates because of their global reach [of recovery], but local banks will have to be stringent while issuing cards to people of different nationalities."
Global banks like HSBC require a minimum gross salary of Dh20,000 per month for HSBC platinum or gold cards, while most local banks require a gross salary of Dh10,000 for their credit cards. – Emirates Business 24|7
