ABN Amro Cuts Credit Card Limit to One Tenth

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ABN Amro India has chopped the credit limit of some credit card customers to a tenth and raised the minimum amount payable to 7% of total dues from 5%, possibly to persuade them to surrender their cards as it draws closer to selling its retail operations to UK’s Hong Kong and Shanghai Banking Corp, or HSBC.

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.

It 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. Once it is approved HSBC would take over these retail operations from RBS in India, China and Malaysia.

The move is a standard industry practice. Giving a reasonable explanation for their approach they are putting forward a statement that as a responsible lender, they review card limits and take appropriate action on an ongoing basis to protect their customers and manage risk.

Operations from ABN Amro said it has more than 4 lakh active credit card users. The bank’s strategy 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.

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Ansh Raj is a well known author and has been writing content for Rupeetalk. Rupeetalk is the leading personal finance portal in India providing excellent financial planning and best home loan in India.

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