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- Dubai 05:29 06:47 12:13 15:10 17:33 18:51
Faced with sagging loan books and shrinking deposit growth, both foreign and local banks in the UAE have been raising service charges across different segments of late.
Royal Bank of Scotland has introduced a Dh10 monthly maintenance fee on its 'free-for-life' credit cards beginning this month.
Dubai-based Mashreq is tipped to follow suit with the Dh10 monthly maintenance charge on some of its credit cards (with no annual fees) from March.
HSBC UAE introduced a Dh25 fee on December 1, 2009, for making over-the-counter credit card payments, arguing that customers could use machines for cash and cheque deposits.
In September 2009, HSBC introduced a charge of Dh10 for receiving paper statements for accounts and credit cards. And effective February 1, monthly finance charges on all transactions (purchase and cash advance) for HSBC Premier Credit Cards has been revised to 2.25 per cent per month.
Last year, Dubai Bank introduced a Dh4 monthly SMS charge for updating account activity through text messages to registered mobile numbers. "A rise in fee may be the result of banks wanting to reinforce revenue lines as net interest revenues might be under pressure for some," said Sofia El Boury, Banking and Finance Research Specialist, Shuaa Capital.
"The ramp-up of charges associated with retail banks is largely a result of banks looking to shield their earnings from the reduction in loan growth and a reduction in net interest earnings," said Ian Munro, Head of Research, Mac Capital Advisors, Dubai.
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