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Habib Bank AG Zurich | BASE RATE |
Q 01) We came to know that Habib Bank AG Zurich, UAE (HBZ-UAE) is increasing rates for its customers, is that true?
In line with the prevailing interest rate climate HBZ-UAE has decided to increase the rates for HBZ Prime Rate and HBZ Lending Rate linked facilities. For more details please contact your relationship manager.
Q 02) What is the Base rate?
The Base Rate is defined as the interest rate at which a bank lends to its Customers. Base rates are updated at a predetermined frequency based on many factors e.g. cost of funding, inflation, market performance, etc. HBZ has two base rates namely HBZ Prime Rate (HBZPR) and HBZ Lending Rate (HBZLR).
Q 03) What change has the HBZ-UAE made in the base rates, i.e. HBZPR and HBZLR?
HBZ-UAE has increased both HBZPR and HBZLR 5.25% to 6.00% effective 15th of July 2022.
Q 04) What type of customers will be impacted with this increase?
The increase will impact all customers having credit facilities linked to either HBZPR or HBZLR.
Q 05) What type of customers will not be impacted with this change?
All fixed rate financing facilities will not have any impact of this revision. Therefore the customers availing Credit Cards, Auto Loans, Personal Loans etc. will not be affected.
Q 06) Has there been any other changes made to my loan terms and conditions?
No, your loan terms and conditions remain the same.
Q 07) Is the Base Rate revision applicable to existing and new consumer loan?
Yes, it is applicable to existing and new loan/financing customers.
Q 08) Will the Base Rate revision impact the return on saving and deposit accounts as well?
No, this change will not have any impact on the return on saving and deposit accounts.
Q 09) How are you going to communicate the base rate increase to Customers?
The Base Rate change (HBZPR, HBZLR) has been communicated to customers through publications in the English and Arabic newspapers (Khaleej Times and Al Bayan). Our website has details of this change under the announcements section. In addition, customers have been sent letters as well.
Q 10) Why has HBZ-UAE published these rates in newspaper?
HBZ believes in transparent communication with its customers. As such any rate increases or decreases need to be communicated in advance. This is also part of the terms and conditions signed between the customer and HBZ. Therefore, HBZ has published the new Base Rates (HBZPR, HBZLR) in the newspapers.
Q 11) What other communication method will be adopted HBZ-UAE to communicate the same to the Customers?
The same will be communicated to Customers using the following channels:
- Newspaper advertisement
- Call center (Dial in customers)
- Branches (Customer calls or walk ins)
- Letters
Q 12) Why are these rates going up?
Since 2021 December the interest rates have increased 75bps due to economic conditions (including inflation) in the global markets as well as UAE. Therefore, we have to align our Base Rates accordingly.
Q 13) How will this effect my mortgage, as it has a fixed rate for first 2 years?
You rate will not change during your first 2 years as detailed in your offer letter. Afterwards your mortgage will be charged interest as per the relevant Base Rate (HBZPR or HBZLR).
Q 14) Will this impact my existing approved facilities, not yet disbursed?
Yes, from the implementation dates (15th July, 2022) all new disbursements of facilities will be done using the revised base rate, depending on whether it’s an individual loan or a company loan.
Q 15) When will the rate change will be implemented?
The Rate change will be implemented as of 15th of July, 2022.
Q 16) Will rate increase impact my / our periodic installment?
Yes, the Rate change will increase your regular monthly installment.
Q 17) If I have further enquiries on revised Base Rates (HBZPR/HBZLR) whom should I contact?
You may contact your Relationship Manager, alternatively you can visit your respective branch.
Q 18) When is the next Base Rate change likely?
The Bank revises the Base Rate on a periodic basis to reflect the prevailing economic environment. In case of any further changes you will be notified.
Q 19) I do not agree with the increase in the interest rate – what do I do next?
The increase in interest rate is very modest and the bank operates in the same eco-system as you where we have seen an increase in the prevailing interest rate. While the decision has been made to increase, we are open to understand your concerns in more details and request if you can contact your dedicated relationship manager or contact your Branch.