Rakbank Reduces Credit Card Limit To AED5,000 As Covid-19 Bites

The National Bank of Ras Al Khaimah (Rakbank) has flattened its credit card limit to AED5,000 for select customers as Covid-19 challenges hit the financial institution which reported a 43.2 percent drop in net profit in Q1 2020 at AED153.5 million compared to Q1.

Some of the customers previously had credit limits as high as AED150,000 and as low as AED36,000.

In a message sent to select customers on Thursday, the bank said: “Dear Customers, based on a periodic review of our policy, the credit limit on your Rakbank credit card has been revised to AED5,000”.

In an email statement to Arabian Business, the bank said the limit cap is part of its risk monitoring activity. 

"The increase or decrease of customers’ Credit Card limits are part of an ongoing portfolio risk monitoring activity that the bank conducts periodically through which any decisions made are based on Rakbank's internal risk assessment policies and customer utilization of limits,” it said.

The bank’s drop in profit is largely due to an additional AED130 million in IFRS 9 provisions it took to combat the economic impact of the virus, according to CEO Peter England. 

The provisions are the International Accounting Standards Board's (IASB) response to a financial crisis.

England claimed the bank had “an exceptional January and February” and was on track for one of its "best quarters on record until the events around COVID-19 began to unfold”. 

However he added the bank is "very well positioned to weather the current challenges with very high levels of capital, liquidity and precautionary provisions, leaving us in a very strong position to help our clients through these very challenging times.”

Response from Rakbank

We refer to the recently published article regarding RAKBANK’s credit card limits.

We would like to state that the article is factually incorrect and is very misleading. RAKBANK regularly reviews the credit card limits of its customers and we acknowledge that during a recent exercise, the limits of a relatively small percentage of our customers were lowered based on our data analysis.

The vast majority of our customers were unaffected by this exercise and for those who were, we reduced the limit based on customer utilization trends to a minimum of AED 5,000 for active customers. The impression given in the article that RAKBANK reduced a large number of card limits to amaximum of AED 5,000 is completely incorrect.

Notwithstanding what was stated above, the Bank recently realized that a very small number of customers were incorrectly impacted by the card limit readjustments and we are working to rectify this as soon as possible. We appreciate our customers’ patience as we work as quickly as we can to address these cases.

Should individual clients impacted by COVID-19 wish to avail a financial relief, they can reach us at wesupport@rakbank.ae

RECENT NEWS

UAE Announces Major New Tax Rules

UAE introduces Cabinet Decision to amend tax rules and attract investment Read more

UAEs Maseera Acquires Egyptian Fintech ADVA

The move marks a critical milestone in Maseera’s regional expansion strategy Read more

Oman Mandates IBAN For Domestic Transfers From July 2025

The move follows the Oman Central Bank's implementation of the IBAN system for international transfers from March 31, 2... Read more

Egypt And Jordan Thank The European Parliament For New Financial Aid

The European Union members recently approved loans worth $4.4 billion in three instalments to Egypt and $555 million to... Read more

Standard Chartereds SC Ventures To Replicate Asia, Africa SME Model In GCC

SC Ventures to bring its successful SME building strategy in India, South East Asia and Africa to GCC, and plans to rol... Read more

UAE Central Bank Revokes Licence Of Dynamics Insurance Brokers For Regulatory Breaches

Dynamics Insurance Brokers "failed to comply with the licensing terms and requirements issued by the Central Bank and w... Read more