Regulatory Alerts2015-04-18
Clarification of Article 83 of the Implementing Regulations of the Finance Companies Control Law and Article 9 of the Consumer Financing Regulations
Saudi Arabian Monetary Authority (SAMA) clarifies that the 1% or 5,000 Saudi Riyal cap on administrative fees under Articles 83 and 9 of the Finance Companies Control Law Implementing Regulations and Consumer Financing Regulations encompasses all unavoidable costs required to secure financing, including valuation, inspection, and registration fees. The circular mandates that banks alone are responsible for coordinating with third-party service providers and settling their charges, explicitly prohibiting the delegation of these payments to borrowers. Additionally, all mandatory fees and expenses incurred by beneficiaries to obtain financing must be fully incorporated into the Annual Percentage Rate (APR) calculation.
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