Largest Gulf lender to offer fewer loans

LENDING DECISION: Emirates NBD is limiting the number of loans it will offer as the global credit crunch. (Getty Images)

Emirates NBD, the Gulf's largest lender by assets, says it has decided to offer fewer large loans and long-term repayment schemes in a campaign to encourage responsible lending after the global credit crunch.

"Large loan amounts and long repayment periods that can place a considerable strain on the borrower will be minimised through this process," the bank said in a statement on its website.

In line with efforts to ensure that customers are not overleveraged, Emirates NBD has introduced a scheme whereby customers can return loans at no charge within a week.

"Emirates NBD is the first bank in the region to introduce a unique seven-days loan return option under which any loan customer who is not satisfied with any of our terms and conditions can return the loan to the bank within a week," said Suvo Sarkar, General Manager, Retail Banking at Emirates NBD.

"All levied fees and charges will be reversed ... We believe that sound financial planning is a pillar for continued economic growth."

The central bank of the United Arab Emirates introduced last month a 50 billion dirham ($13.6 billion) emergency lending facility to help ease the effects of the liquidity crunch.

The UAE's 3-month interbank lending rate rose to 4.70625 percent on Wednesday after weeks of rises as liquidity tightens. (Reuters)

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READERS' COMMENTS

Er...
Posted by Mark Flap on Wednesday 8 October 2008 at 12:24 UAE time


Shouldn't the bank work out whether a customer is over-leveraged before it offers or approves the loan? I think it's called risk management, or something...

This doesn't really sound like Emirates NBD is getting tough on lending if it's relying on customers to decide that they can't afford the repayments. All in all, a pretty weak story / press release from Reuters there.

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