UAE banks hike minimum balance requirements: Expats may feel the pinch

ABU DHABI: Banks in the UAE are planning to increase the minimum balance requirements for accounts. The threshold is being raised from AED 3,000 (approx. Rs 69,925.80) to AED 5,000 (approx, Rs 1,16,543.00). This move is part of the UAE Central Bank's new regulations on personal lending. The new rule will come into effect starting June 1.

As per the new policy, account holders who fail to maintain the minimum balance of AED 5,000 will be charged a monthly fee of AED 25. This additional fee will apply to individuals who do not have a credit card or any active financial transactions with the bank. Meanwhile, customers who maintain a balance of AED 20,000 or more will be exempt from the fee. Likewise, those who receive a monthly salary transfer of AED 15,000 or more will also not be charged the fee.

Customers with no credit card, overdraft facility, or loans, but who transfer a monthly salary between AED 5,000 and AED 14,999, or those with a salary transfer below AED 5,000, will be charged the AED 25 fee. Officials also stated that bank customers not falling under any of these categories will have to pay a fee of AED 100 or AED 105.

Financial experts warn that this new banking policy could adversely affect low-income workers. To maintain the minimum balance, such individuals may be forced to cut back on personal expenses and reduce the money they send back home. Alternatively, they may be pushed toward taking credit cards or loans to avoid penalties.