UAE banks urged not to hike interest rates

RATES WARNING: Abu Dhabi Chamber of Commerce board member Saeed Al-Ka'abi has called on banks not to hike interest rates. (Getty Images)

A leading Abu Dhabi business figure has warned banks in the UAE not to hike interest rates to customers at a time of global financial crisis.
Saeed Al-Ka'abi, member of the board of directors of the Abu Dhabi Chamber of Commerce and Industry (ADCCI) and chairman of Ascorp Holdings, said large increases in interest rates on existing and new loans was "unjustified", news agency WAM reported.

He said: "Dispatching letters recently from the banks to the customers on increment of the interest rates on old and new loans by 7-17 per cent is concocted by the banks to reap narrow interests by emerging from the global financial crisis with lucrative gains at a time all need to join hands to immunise the national economy from potential reverberations of the current global financial crisis."

His comments come just days after Arabian Business revealed that some lenders across the UAE had ramped up the interest rates on home loans.

The likes of Amlak, HSBC and Barclays had increased their rates by a minimum of two percent.

Al-Ka'abi added: "It (the policy of high interest rate increases) is an attempt to create another financial crisis through making use of the current global crunch."

He said that this attempt was in contrary with the measures taken by the banks in other countries, where profit on loans were reduced in the beginning of the global financial crisis to alleviate negative affects on customers.

He urged the central bank and other authorities to prevent any interest hike on existing loan contracts.

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