Bank claims customer accounts were in violation of local financial regulations
Barclays said that the sudden closures of a number of personal and corporate accounts in the UAE this week was because they were in violation of local financial regulations, and not related to the imminent sale of the business.
Business and personal banking customers told Arabian Business that they had been telephoned by the lender on Tuesday morning, and informed that their accounts were being frozen. Arabian Business understands that around 500 accounts have now been frozen.
Customers complained that they had been given no notice of the closures and that staff in the bank’s Downtown branch struggled to explain to them why their accounts had been closed.
On Wednesday, a spokesperson for Barclays told Arabian Business that the action was “routine” and had been undertaken to comply with UAE financial regulations. They added that personal accounts had been closed for reasons including out-of-date residency visa information, or expired trade licence details for corporate account holders.
The bank insisted that all customers had been given the minimum required notice period and informed of the action via channels including telephone and email.
"Barclays routinely reviews all its accounts as part of the local and global regulatory requirements. In the UAE, as part of review process, the bank has identified certain accounts with expired/deficient information and/or documentation and have repeatedly reached out to customers to remediate. For customers who did not provide the required information/documentation, Barclays had to take the necessary consequential action and hence accounts were blocked. Currently, Barclays is working with impacted customers on a case by case basis to extend support where required," the lender said in an emailed statement.
Several more customers came forward to Arabian Business on Wednesday to express their displeasure with how the account closures had been handled by Barclays.
One expat who has been living in the UAE for 13 years said that a clerk at the bank told them the closure was “because you are Iranian” and was advised to open an account with a local bank.
Another corporate customer told Arabian Business that their relationship manager at the Downtown branch said that the closures were in preparation for the retail bank’s coming sale. They claimed they had been told on Monday they would be given 15 days notice before their account was closed, before it was frozen later that day. They said that they were still waiting to be paid the balance of their account by Barclays.
In September, Barclays announced it will sell its retail bank in the UAE, highlighting the challenges foreign banks face in the Gulf competing against cash-rich local rivals who are finding it easier to meet stricter rules on risk.
Under chief executive Antony Jenkins, the British bank is axing at least 3,700 jobs globally, reining in pay of senior bankers and closing businesses across the group in the face of new capital rules.
"Barclays has decided to re-focus its efforts in the UAE on its key strengths in corporate and investment banking and wealth and investment management," the bank said in a statement last month.