Over 6,500 credit card defaults in Abu Dhabi

More than 6,500 credit card holders in Abu Dhabi defaulted on debt owed to local banks in 2011, prompting their lenders to report them to the police, a senior police officer was reported on Tuesday as saying.

The reports involved a total debt by the defaulters of around Dh203.1 million and bankers said they reported the debtors after a long delay in repayment.

“In 2011, we received 6,502 reports from banks about credit card defaulters involving a total Dh203.14 million,” said Brigadier Maktoum Al Shareefi, director of the Capital police station in Abu Dhabi.

“We urge all Emiratis and expatriates to be careful in spending so they can develop a saving habit and avert such problems…..they should follow instructions on personal loans by the central bank because defaulting will cause them economic, social and security problems,” he told the Dubai-based Arabic language daily 'Emarat Al Youm'.

The paper quoted a Central Bank source as saying banks are authorised to report card holders who default even for one month, adding that many banks have started to give their clients three months to pay before reporting them.

“We urge banks to take advantage of the risk section at the Central Bank to enquire about any client before approving a credit card,” the source said.

Bankers believe a planned credit rating agency to be launched by the UAE shortly would tackle credit card default problems. “Banks will be able to gather accurate information about the installments paid by clients every month and will determine whether the client can take more funds,” said Saleh Ali, deputy CEO of RAKBank branch in Abu Dhabi.

In a recent statement, the Central Bank said it would soon issue regulations on credit cards as was the case with personal loans.
 

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