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The Saudi Arabian Monetary Agency (SAMA) has issued regulations for debt collection by financing entities from individual customers. The rules require all banks and finance firms operating in the Kingdom to deal fairly with customers at all stages of the relationship between them.
Among the stipulated rules is that banks are prohibited from deducting any amounts from customer accounts without the existence of a judicial decision or without obtaining prior approval from the client, according to a statement posted in Arabic on SAMA’s website on April 12.
Banks are also prohibited from temporarily suspending customers’ accounts, or from granting them access to funds without a judicial ruling.
Banks should also - upon request - reschedule debt in the event of a compulsory change to a client’s circumstances without any additional fees or changes to the cost of loans, but without.granting any new financing.
SAMA has also said that any firm involved in financing activities needs to communicate with customers before referring cases to judicial authorities.
Earlier this year, Saudi Arabia lifted the maximum loan-to-value rate for mortgages to 90 percent - from 85 percent - for first-time homebuyers in a bid to stimulate mortgage lending:
Further Reading:
- Saudi Arabia preparing tougher rules for insurers
- Saudi enforcement courts digitized, clients won't be visiting courts
- Fitch affirms Saudi Arabia's outlook stable at ‘A+’
- Saudi finance minister says drawdown of foreign assets to slow further
© ZAWYA 2018
