Loan interest rate
I had taken a business loan from Rakbank about 10 months ago and have since maintained an excellent repayment track record. So imagine when, out of the blue, I receive a notification that my interest rate would go up by 0.2 per cent, from April! Well, I do understand that banks have terms and conditions, but at this stage when the lending rates for banks have gone down, Rakbank continues to indulge in the unfair practice of increasing the interest rate in the middle of the loan period. The interest rates around the world have fallen, but there is no action by the Central Bank against banks for carrying out such practices. Such policies could encourage more defaulters to emerge. Upon speaking to the bank officials they simply pointed out the company's terms and conditions. It's very easy for them to send out such notifications, but they need to realise that this affects many who have been paying the installments on time. Despite such a treatment, Rakbank continues to publicise that other banks are credit sharks waiting to eat you up.
From Mr Kishore Bhatia
Dubai
Mr Ian Hodges, Head of Personal Banking, Rakbank, responds: At Rakbank, we strive to deliver the best to our customers while keeping their interests prime in all our endeavours. In the recent months, the cost of funds has risen and this amongst other factors has resulted in an increase in the loan interest rate. It may kindly be noted that all our Rak Finance loan customers are advised about the terms and conditions on the loan application form, of the possibility of a change in interest rates any time during the loan tenure. We, however, ensure that any change in rates is communicated to our customers in writing and in order to minimise any inconvenience, ensure that installment amounts remain unchanged while the loan tenure is extended. We had contacted Mr Bhatia on April 21 to clarify and address his concerns on the aforementioned issue.
Credit shield
I had a firsthand experience on the credit shield issue with Abu Dhabi Commercial Bank and have since wasted a lot of time following up. I lost my job on November 1, 2008 but continued to pay my monthly outstanding minimum balance amount, without fail, till January 2009. In fact I was paying the bank more than double the required minimum amount every month. In the first week of February 2009, I requested the bank to use my credit shield as I was still unemployed and had run out of money to pay the bills. They asked me to forward the proof of termination, bank statement and passport copies. Now it's been over two months and there has been no positive action or reply from the bank. On following up, they informed me that my papers have been forwarded to an insurance company with which the bank has a tie-up on credit shield and that the final decision rested with them. How long will it take for the insurance company to make a decision? As per the bank, I have to contiue paying the minimum amount every month, till the insurance company takes a decision. My failure to pay on time could impact my case with the insurance company. This is very funny, especially since a job loss and insufficient funds were the only reasons I requested the bank to cover my outstanding bills with a credit shield option. Now, I have no choice but to borrow money from my friends to pay the installment every month. The outstanding amount was less than Dh7,000 and I have already paid more than Dh2,000 in the past few months. What is the use of a credit shield and how can a bank get away without being held accountable? There is no guarantee of benefits despite them deducting a fee every month! What I fail to understand is that when ADCB had entered into a contract with the insurance, they would have also agreed on a time period to respond to a customer. They can't enter into a contract without laying down such important guidelines.
From Mr Jigi Kumar
Dubai
Ms Farah Kais, Communications Coordinator, ADCB, responds: Please be advised that we have received the discharge claim and that the payment will be done by the insurance company after obtaining the customer's signature. Further claim will be processed on receipt of additional documents as required by the insurance company. The bank is following up with the customer till this gets resolved. Please note that the claim was sent to the customer's e-mail account for his signature on May 3, to proceed with the payment. The customer was satisfied with it.
Mr Kumar responds: Thanks for the support provided by Gulf News in getting issues sorted out for me. Also I wish to extend my special thanks to Ms Rana from customer service department, ADCB, Abu Dhabi.
