HSBC chief's jail comment 'insensitive'

UAE residents have termed as “insensitive” a senior HSBC official’s recommendation that defaulting customers should be jailed.

Abdulfattah Sharaf, head of HSBC in the UAE has been quoted in Arabian Business as saying that, jailing debtors in the UAE remains an effective way for banks to retrieve bad loans.

Edwards Emmanuel, who works at an academic institution in the UAE said, “I am not surprised with such statements. Banks are being really hard due to defaulters. But the statement is very insensitive. These banks need to first exhaust all options, before they resort to legal means.”

Dina Mahmoud who recently lost her job feels defaulters are not to be blamed.

“If they are made redundant and if they are unable to pay their monthly installments, what is the point in putting them to jail,” she wondered.

“I don’t know if there is any other part of the world where banks have decided to jail their clients for non-payment,” she added.

Sahraf while stating that jailing people has helped his bank, also noted that stricter measures has resulted in less number of people leaving the country without paying their dues.

According to Ahmad Jamal there are examples of banks negotiating with clients and reducing their balance payments in an effort to settle the loan.

“In fact I have spoken to collection departments of three banks, pretending to be a HR executive from my company, and got the balance payment slashed by 50 per cent,” banks are adopting every desperate measure to ensure that they get their money back.

Ramesh Kumar, originally from Bangalore says he negotiated with a bank and brought down his credit card payment to Dh600 after he lost his job two months ago.

“My total bill was around Dh8,300. But there was no way I could pay that back. Banks are generally giving a fifty per cent discount when they are told that you have lost your job. I was lucky in a way,” said Kumar who left the UAE last evening.

However one senior sales official of a UAE based bank told on condition of anonymity that banks have become very strict and are not entertaining any discounts.

“The banks become alter two months after it stops receiving payments. After six months of nonpayment we resort to legal procedures. I have known several cases of clients requesting the bank to reduce their final settlements due to loss of jobs. But we have refused to yield,” said Nitin Malhotra.

In May Reuters reported that some UAE banks are seeing up to 2,500 customers leave the country every month without paying off their credit card bills.

Quoting David Martin, business advisor at RAK Bank it said most of those leaving without settling their credit card bills were linked to the construction sector in Dubai, the sector that has been the hardest hit in the UAE.

Martin said the bank's research indicated banks in the UAE have 1,500-2,500 customers leave every month over the past six months without paying what they owe on credit cards.

 

Print
  • Twitter
  • submit to reddit
comments powered by Disqus
Find the best properties for sale & rent in the UAE
Available on the App StoreAndroid app on Google PlayGet it at BlackBerry App World

Most Popular on Emirates 24|7

Poll

How has your daily commute been affected post the summer break?

Latest jobs available

More jobs on Emirates 24|7

In Case You Missed It ...

eSuggestion eComplain eComplain eSuggestion

Follow
Emirates 24|7

Follow
Emirates 24|7
Pinterest Facebook Facebook Twitter RSS

Your Feedback

Are you satisfied with your browsing experience?