ABN Amro India has reduced the credit limit of some credit card clients to a 10th and hiked the minimum amount payable to 7% of total outstanding from 5%, mostly to convince them to give up their cards as it is nearing selling its retail operations to Hong Kong and Shanghai Banking Corp (HSBC).
ABN Amro, has also determined to halt fresh retail lending, including credit card and personal loans, to stop a load of bad loans, sources familiar with the matter said.
One of them said even during the height of the financial crisis, ABN Amro did not take such drastic steps.
One credit cardholder said, “The bank has brought down my credit limit to Rs 2,500 from Rs 48,000,”and added that the bank told him that it was undertaking the step for all its clients. Another person was told that the minimum amount payable has been increased to 7%. Both of them had never defaulted on payments.
An ABN Amro spokeswoman said the step is a standard industry practice. She emailed saying, “As a responsible lender, we review card limits and take appropriate action on an ongoing basis to protect our customers and manage risk”.