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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 changing the Base Rate for its customers, is that true? How does it impact me?
Yes. Habib Bank AG Zurich, UAE has decided to change its BASE RATE to “HBZ Prime Rate” for Commercial Customers and “HBZ Lending Rate” for Retail Customers (Currently “Base Rate” and “Consumer Base Rate”). Please note that this change will not result in any change in your current pricing on your borrowings. For more details please contact your relationship manager.
Q 02: Is the change in BASE RATE linked to the introduction of VAT?
No, this has nothing to do with the introduction of VAT. Please note that VAT is not applicable on interest payments.
Q 03: 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. Habib Bank AG Zurich, UAE has decided to change its BASE RATE to “HBZ Prime Rate” for Commercial Customers and “HBZ Lending Rate” for Retail Customers (Currently “Base Rate” and “Consumer Base Rate”).
Q 04: What change has the HBZ-UAE made in the base rate?
HBZ-UAE has moved to two new Base Rates (HBZ Prime Rate and HBZ Lending Rate) as mentioned in Q1. There is no increase or decrease in pricing.
Q 05: What type of customers will be impacted with this base rate change?
The Base Rate change will impact all customers having credit facilities linked to the Base Rate. If your offer letter mentions ‘Base Rate’ or ‘Consumer Base Rate’ in the pricing section this change will impact you.
Q 06: What type of customers will not be impacted with this change?
All fixed rate financing facilities or financing linked to EBOR/LIBOR will not have any impact of this revision. Therefore, the customers availing Credit Cards, Auto Loans, Personal Loans etc. will not be affected. Please note that the change is related to moving to a new Base Rate, i.e. “HBZ Prime Rate” for Commercial Customers and “HBZ Lending Rate” for Retail Customers. There is no impact on pricing.
Q 07: Has there been any other changes made to my loan terms and conditions?
No, your loan terms and conditions remain the same.
Q 08: Is the Base Rate change applicable to existing and new consumer loan?
Yes, it is applicable to both existing and new loan/financing customers.
Q 09: Is the Base Rate change impact the return on saving and deposit accounts as well?
No, this change will not have any impact on return on saving and deposit accounts.
Q 10: How are you going to communicate the base rate change to Customers?
Our website has details of this change under the announcements section. In addition, customers have been sent letters as well.
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 :
- Call center (Dial in customers)
- Branches (Customer calls or walk ins)
- Letters
Q 12: Why is this change happening?
To reflect the current economic conditions and to be more transparent in our pricing practices HBZ is moving to new Base Rates.
Q 13: What type of facilities will be impact with this change in base rate?
All financing facilities linked to Base Rate or Consumer Base Rate will be impacted with this change. Namely those facilities are :
- Commercial Loans & Advances
- Commercial Mortgage Loans
- Residential Mortgage Loans
- Overdrafts
- Export related facilities
- Import related facilities
- Local Bill Discounting
- Lombard Lending
- Rental Loans
Q 14: How will this effect my mortgage, as it has a fixed rate for first 2 years?
This change will not affect any pricing. It will remain the same as previous terms.
Q 15: I pay my periodic loans payments by Direct Debit; do I need to do anything?
No, we will ensure your correct periodic payments are taken from your nominated Bank Account. This change of Base Rate will not have any impact.
Q 16: Will this impact my existing approved facilities, not yet disbursed?
Yes, from the implementation dates (1st of August, 2018) 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. The way the pricing is calculated will change, the actual pricing will remain the same.
Q 17: When will the base rate change will be implemented?
The Base Rate change will be implemented from 1st of August 2018 for existing facilities. In case if your renewal happens earlier than this date the base rate change will be done at the time of renewal.
Q 18: My Auto Loan repayments will also change with this base rate change?
No, there is no pricing change, therefore your loan repayments will remain the same.
Q 19: Will base rate change impact my / our periodic installment?
No, The Base Rate change will not impact your regular monthly installment or your repayable balance. The only change will be the linking the pricing to HBZ Prime Rate/HBZ Lending Rate. For more information please contact your relationship manager.
Q 20: If I have further enquiries on the changes in the Base Rate whom should I contact?
You may contact your Relationship Manager, alternatively you can visit your respective branch.