ABN Amro cuts credit cards Limit

ABN Amro India has cut 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 Credit Cards as it draws closer to selling its retail operations to UK’s Hong Kong and Shanghai Banking Corp (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, two people familiar with the matter told ET.
One of them, a senior bank executive, said even at the peak of the financial crisis, ABN Amro did not resort to such drastic cuts.
An ABN Amro spokesperson called the move a standard industry practice. "As a responsible lender, we review card limits and take appropriate action on an ongoing basis to protect our customers and manage risk," she replied by email.
Although ABN Amro had no comment on the number of credit card users, a person familiar with ABN Amro’s operations said it has more than 4 lakh active credit card users. The bank’s strategy, he said, 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.