Standard Chartered has informed thousands of its UAE small and medium enterprises (SME) business customers that it is closing their accounts due to pressure from US regulators over compliance issues.
The bank has sent letters to a number of its SME customers notifying them they have a month to close their accounts over allegations that it failed to properly check possible money laundering.
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"Standard Chartered Bank will no longer be able to provide banking services to you, and your account(s) will be closed 30 days from the date of this letter," the London-listed bank said in the letter.
In August this year, Standard Chartered agreed to pay as much as $300m to New York’s banking regulator to settle allegations that it failed to properly check possible money laundering originating from Hong Kong and the UAE.
Under the settlement, the bank was given 90 days to end high-risk relationships with SMEs in the UAE and suspend processing of dollar-denominated payments for some clients at its Hong Kong unit.
According to the UAE central bank, up to 8,000 clients were possibly affected by the US settlement.
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By GlobalDataLouay Al Samarrai, the managing director of Active Public Relations in Dubai, who received a letter about his account closure, said: "If they care about their reputation at all the least they can do is issue a directive saying that we understand the time crunch we’ve put people in and give them an additional 60 days.
"I need more than 30 days notice as it takes a minimum of a few weeks to set up a new account with another bank," he added.
Standard Chartered said it would honor existing borrowing agreements with customers with loans, allowing them to pay back outstanding amounts under the existing repayment timetable.
The move follows the bank’s plans to sell to sell $400m of its small and medium enterprise loan book to UAE-based banks following a review of the business.
"We are making every effort to ensure that any inconvenience for those clients impacted is minimized and have set up a dedicated contact centre, provided clients with a detailed exit guide and a set of FAQs that minimize confusion and answer our clients’ queries transparently," said the bank.
