ABN Amro, owned by UK’s troubled Royal Bank of Scotland, or RBS, has also decided to freeze fresh retail lending, including credit card and personal loans, to arrest a pile-up of bad loans, two people familiar with the matter told ET.
One of them, a senior bank executive, said even at the peak of the financial crisis, ABN Amro did not resort to such drastic cuts.
ABN Amro continues to do business in India under its original moniker even after RBS took over its Asian operations in 2007. HSBC is said to have signed a deal to buy RBS’ retail businesses in India, China and Malaysia and is awaiting regulatory approvals in the three countries.
"The bank has brought down my credit limit to Rs 2,500 from Rs 48,000," said one cardholder, adding that he was told the bank was carrying out the exercise for all its customers. Another person was informed recently that the minimum amount payable has been spiked to 7%. Both said they have never defaulted on payments.
An ABN Amro spokeswoman called the move a standard industry practice. "As a responsible lender, we review card limits and take appropriate action on an ongoing basis to protect our customers and manage risk," she replied by email.
Although she had no comment on the number of credit card users, a person familiar with ABN Amro’s operations said it has more than 4 lakh active credit card users. The bank’s strategy, he said, could be to discourage users and get them to give up their cards or reduce their credit exposure.
ABN Amro has been up against a large number of employee exits to competitors after the deal with HSBC came to light. It has also laid of some of its employees in the credit card and personal loan departments.
Currently, the bank has around 2,854 employees, down from 3,300 in early 2008. About 2,500 are in the retail and commercial banking department. It has another 8,500 in its two outsourcing arms.
Sumber : The Economic Times
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