Two of Dubai’s largest banks have hiked the minimum salary required to get a personal loan amid the escalating financial crisis and growing concern over bad debt, Arabian Business can reveal.
Emirates Bank International on Monday doubled the minimum monthly salary threshold to 10,000 dirhams ($2,722) from 5,000 dirhams, citing the financial crisis.
Staff at the company, which is a subsidiary of the country’s largest bank by assets, Emirates NBD, said they had been given Monday to process applications already in the pipeline, given that all the documentation required was provided.
The move comes just a month after Emirates Bank increased the amount customers must earn in order to get a loan to 5,000 dirhams ($1,361) from 3,000 dirhams.
An Emirates Bank spokesman said the company did not comment on credit policy for retail customers, but that the policy was “revised in a timely manner, according to market conditions”.
Meanwhile, Dubai Islamic Bank, the UAE’s largest sharia compliant lender, more than doubled its minimum monthly salary threshold two weeks ago to 8,000 dirhams from 2,500 dirhams, staff said.
Dubai Islamic Bank was not immediately available for comment.
Emirates Bank and Dubai Islamic are the latest in a long line of UAE-based banks to tighten lending conditions due to the freeze in credit markets.
Several British banks operating in the country, including Lloyds TSB and HSBC, have significantly increased their minimum month salary thresholds to obtain a loan, as have local banks such as National Bank of Abu Dhabi (NBAD) and National Bank of Dubai (NBD).
Egyptian investment bank EFG-Hermes said earlier this month UAE banks were poised to post declines in net profit in 2009 as they aggressively restrict lending and increase provisioning due to the financial crisis.
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