Clampdown on bank charges



Using a credit card or cashing a cheque is expected to become cheaper under new Central Bank rules designed to restrict fees and commissions charged by high street banks.

Banks will also not be allowed to charge fees for opening a new account or leaving one dormant, while the cost of closing an account within a year of opening it will be capped at Dh100 (US$27.20).

The cost of taking out a personal loan will also change, with the charge pegged to a borrower's income.

"This is one step to establishing proper standards in the industry," said Dr Mohammed al Waqfi, an assistant professor with the College of Business and Economics at UAE University.

But experts say that more needs to be done in the short term to relieve the heavy debt burdens carried by many consumers in the region.

Between 65 and 75 per cent of residents in the UAE, and up to 85 per cent of those living in Dubai, are still in debt, according to data from the International Swiss Debt Management Consultancy (ISDMC), a credit counselling and debt management firm serving the Middle East.

The new rules are expected to "lighten the debt load which consumers are currently carrying, which is compounded by a lot of hidden charges", said Yohannes Mazeingia, a managing director at ISDMC.

"But the most pressing thing that would benefit the consumer at this time is for banks to be more flexible in arranging a structured payment instalment that is affordable for individuals," he said.

Even under the new rules, borrowers can take out a personal loan at 20 times their monthly salary. And banks will be able to set repayment instalments for those loans as high as 50 per cent of a worker's gross salary, or 30 per cent of a customer's pension if they are retired. Experts argue these instalments may still be too high, particularly because the UAE lacks a proper credit reporting system that would allow banks to make multiple loans to a borrower and set appropriate repayment plans.

"The main problem is people are in debt, and banks need to be more flexible in arranging more affordable instalments," said Mr Mazeingia.

Yet the new regulations should also make it easier for consumers to take out a loan when they need one and can afford to pay it back, which became difficult during the credit crisis.

In 2009, some UAE banks were reportedly losing up to 2,500 customers a month who fled the country without paying off their credit card bills. "Many people took out a loan, quit their job then ran away," said Dr al Waqfi. "Control on these issues is needed so that banks will be able to distinguish between people who are reliable and people who are not."

The changes may also affect the way customers perceive their banks. Last month, a study from Ernst & Young found that 25 per cent of retail banking customers in the GCC plan to switch banks this year, while another 10 per cent said they had already switched because of dissatisfaction.

Teams

Punjabi Legends Owners: Inzamam-ul-Haq and Intizar-ul-Haq; Key player: Misbah-ul-Haq

Pakhtoons Owners: Habib Khan and Tajuddin Khan; Key player: Shahid Afridi

Maratha Arabians Owners: Sohail Khan, Ali Tumbi, Parvez Khan; Key player: Virender Sehwag

Bangla Tigers Owners: Shirajuddin Alam, Yasin Choudhary, Neelesh Bhatnager, Anis and Rizwan Sajan; Key player: TBC

Colombo Lions Owners: Sri Lanka Cricket; Key player: TBC

Kerala Kings Owners: Hussain Adam Ali and Shafi Ul Mulk; Key player: Eoin Morgan

Venue Sharjah Cricket Stadium

Format 10 overs per side, matches last for 90 minutes

Timeline October 25: Around 120 players to be entered into a draft, to be held in Dubai; December 21: Matches start; December 24: Finals

The specs

AT4 Ultimate, as tested

Engine: 6.2-litre V8

Power: 420hp

Torque: 623Nm

Transmission: 10-speed automatic

Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)

On sale: Now

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About Seez

Company name/date started: Seez, set up in September 2015 and the app was released in August 2017  

Founder/CEO name(s): Tarek Kabrit, co-founder and chief executive, and Andrew Kabrit, co-founder and chief operating officer

Based in: Dubai, with operations also in Kuwait, Saudi Arabia and Lebanon 

Sector:  Search engine for car buying, selling and leasing

Size: (employees/revenue): 11; undisclosed

Stage of funding: $1.8 million in seed funding; followed by another $1.5m bridge round - in the process of closing Series A 

Investors: Wamda Capital, B&Y and Phoenician Funds