A group of Mashreqbank customers is seeking talks with the UAE central bank to voice concerns about the bank’s interest rate which they claim have raised monthly payments by as much as 30 percent.
Sixty four customers are calling for a meeting with central banks officials to argue that Mashreq violated terms of variable rate mortgage agreements when it switched its base for calculating its charge from the Emirates interbank offered rate (Eibor) to an internally set one, UAE daily The National reported on Thursday.
“We seek an urgent meeting to discuss the contents of this letter and to table our concerns with the Central Bank to prevent matters proceeding to court action which could be detrimental to the investor-friendly image of the United Arab Emirates,” said the letter obtained by the paper, which plans to be sent out on Thursday.
The paper reported that one Mashreq customer said the bank’s move raised the spectre of even more defaults as customers being asked to pay more were pushed to the brink.
The dispute began after Mashreq sent a letter to customers in November saying it would abandon Eibor starting this month.
Mashreq argued that the rate no longer reflected its overall cost of funding, necessitating the switch, the paper said.
The six-month Eibor stands at 2.2 per cent, down from 4.7 per cent in November of 2008.
Douglas Beckett, the Mashreq chief of retail banking, told The National earlier this month the switch would result in increased payments for about a third of its customers.
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