Could UAE banks get any worse?

Barclays’ behaviour towards its customers is the latest example of bad banking

Earlier this week I interviewed Nick Leeson, the derivatives trader whose risky bets infamously brought down Britain’s Barings bank in 1995.

After the actions of Barclays in the UAE over the past couple of days, I had half a mind to ask Nick if he fancied coming out of retirement and having a go at taking down one or two of the lenders over here.

In case you missed it, the local operation of the London-based bank decided to relieve its books of about 500 or so personal and corporate clients this week. Only not all of them seemed to know about it.

Over the past few days Arabian Business has been inundated with messages from unhappy (ex) customers, many of whom claim that Barclays rang them to tell that their account had been frozen, and would they kindly come right away to collect their balance. One person we spoke on Tuesday told us that the bank was refusing to hand him the cash in his account, as Barclays had already mailed him a cheque for everything he had some weeks earlier. He said he had never received it.

While the reasons for the account closures seemed muddled even among Barclays staff (one apparently told a customer it was because “they were Iranian”), the message coming from HQ was crystal clear.

In a statement sent to Arabian Business, the lender said it had closed the accounts in order to comply with financial regulations set out by the Central Bank.

“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,” it read.

Customers beg to differ, however. All of whom Arabian Business has spoken to since the statement was sent out said that all of their documentation with the bank was up-to-date and that they received no correspondence regarding account closures.

This is the second time in recent months that a big, international bank has become embroiled in controversy over such actions. Earlier this year, HSBC gave a number of SME customers 60 days to vacate after it informed them by post that it no longer required their business.

Given the pedigree of financial institutions like Barclays and HSBC, should they not be leaving the domestic competition (who are far from perfect themselves) for dust? Apparently not.

One thing is for certain though. With Barclays having last month announced its intentions to sell off its retail business in the UAE, we will not have to put up with this sort of attitude to customers for much longer.

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Posted by: Ali

Like some one correctly commented here - most of them are not qualified to run a corner shop.

Posted by: Charles Farran

As one of the largest offshore Company service providers we find it increasingly difficult to open Bank accounts for our International clients in anywhere in the UAE.

It seems that the management of the top world Banks have completely lost the plot. Banks must be reminded that they are simply custodians of clients money, for which they charge heavy fees. when they lose money they just walk away, usually with a large payoff for failure. International business will soon cease up due to the attitude of governments and the Bank directors. Most of these people are not qualified to run a corner shop It is time for Bank clients to start giving these people a hard time. they have had it too easy for too long.
Charles Farran.
Amanda J Molyneux & Company Limited

Posted by: Banked Up Abroad

Got a very small loan from Samba Bank. Paid on time every month. When Barclays closed my account, I paid cash until I moved to HSBC. Still maintained on time. 10 months ago, Samba phoned me a number of times for whatever reason (not for late payments as they were all on time). I never answered their calls. Didn't recognise the number and 9 times out of 10, an unknown landline is marketing, in my experience. They filed a case against me for not answering my phone when they called. Travelled numerous times since the case was filed until a business trip last week when I was ushered away after checking in my bag. Flight went without me and I was detained in locked room for hours. Found out that the case for "me not answering their calls" took 10 months to process and I spent a day with my passport taken away and in a locked room while my fiancee had to sort all out from the outside to get me free. What a great banking system we have in Dubai. Archaic. Antiquated. Unreasonable.

Posted by: Peter Bench

Interestingly the article does not dispute that Central Bank regulations may lie behind this precipitate action. If so, then what else was the bank to do? If not, perhaps you could get the CB to comment?

Posted by: Grant

Mashreq bank closed our business account without any notice! We were always in the black and followed their rules about retaining a minimum balance. After failing to receive a reason as to why our account was closed several enquiries we were eventually told that the bank did not make any money from us! We were unable to access our money for 6 weeks until we could finally open a new account with ADNB. Our application with ENBD was declined after a 5 week process as we couldn't prove our previous experience in our Industry!!

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