Credit card defaults expected to drop
Some banks write off debt after just 180 days.
June 20, 2010 2:29 by Samuel Potter
The largest issuer of credit cards in the UAE expects card debt defaults could decrease by up to 40 percent in 2010, reports Emirates Business.
However the senior official at Mashreq making the claim said the company does not anticipate any spike in revenue; the decrease will be caused by old debt having been written off, and fewer new defaults.
“There will be an improvement of 30-40 per cent, provided there is no more bad news on government debt,” Vimal Kumar, Head of Cards Business at Mashreq, told Emirates Business.
He said Mashreq’s card NPL rates seemed high because it opted for the international practice of writing off a card debt after 150 to 180 days of non-payment of instalments, whereas many banks follow the UAE Central Bank’s cut-off, writing off a bad loan only after 360 days.
If the economy stays on track, then 2010 will be “definitely” better than the past year, he said.