Regulatory Alerts2022-08-31
Emphasis on Applying the Method for Calculating Government Subsidies Provided by the Ministry of Municipal and Rural Affairs and Housing or the Real Estate Development Fund
The Saudi Central Bank mandates that licensed financial institutions exclude recurring government subsidies from the Ministry of Municipal and Rural Affairs and Housing or the Real Estate Development Fund when calculating a customer’s total monthly income for affordability assessments under the Personal Financing Principles. This directive clarifies that only periodic, cash-based subsidies qualify for exclusion, while non-financial and non-periodic allowances remain included in the income calculation. Consequently, borrowers receiving these specific government subsidies will benefit from improved affordability ratios and enhanced access to personal financing.
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