Circular

To:

Peace, mercy, and blessings of God be upon you.

Subject: Rules for Establishing a Customer Care Department in Banks.

Based on the Saudi Central Bank System issued by Royal Decree No. (36/M) dated 11/04/1427 AH, and referring to Saudi Central Bank Circular No. (351...145194) dated 26/11/1435 AH enclosing the updated rules for handling and establishing complaint units in banks.

Enclosed are the Rules for Establishing a Customer Care Department in Banks, which replace the aforementioned rules, and initiate the determination of the minimum instructions banks must comply with to achieve due care for customers.

For your information and implementation effective from 15/07/2023 CE.

Al-Azab

Accept my regards,

Al-Manjah

Yazid bin Ahmed Al-Sheikh
Deputy Governor for Supervision

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Rules for Establishing a Customer Care Department in Banks

(Second Edition - Sha'ban 1444 AH / March 2023 CE)

Important Note:
To follow up on updates and amendments regarding instructions issued by the Saudi Central Bank, the Bank emphasizes the necessity of always relying on the versions published on its website:
www.sama.gov.sa

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Table of Contents

Page Number	Subject
3	Introduction
3	Scope of Application
4	Definitions
4	Part One: Management Tasks, Policies, and Procedures
6	Part Two: Management Units and Their Tasks
9	Final Provisions

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Introduction

The Saudi Central Bank is the authority that monitors and supervises licensed banks, and holds regulatory powers in this regard, including framing and regulating matters related to the rights of those banks' customers and their care, based on the Saudi Central Bank System issued by Royal Decree No. (36/M) dated 11/04/1427 AH, and Article (Four) thereof, which stipulates: "The Bank shall perform its duties in accordance with the provisions of the System, and the regulations and policies issued by the Board, and in accordance with the best international standards and practices, and shall have all necessary powers to achieve its objectives, and may, in this regard, exercise the following tasks and powers: ... Issuing instructions and procedures sufficient to protect customers of financial institutions." In addition to the Bank Supervision System issued by Royal Decree No. (5/M) dated 24/02/1386 AH and its amendments, which granted the Saudi Central Bank the authority to determine the conditions and circumstances a bank must observe when dealing with customers.

Customer care, handling customer complaints, and compensating them financially are among the most important principles outlined in the "HIGH-LEVEL PRINCIPLES ON FINANCIAL CONSUMER PROTECTION", by enabling them to access complaint resolution mechanisms through convenient means and enhancing their financial education and awareness by the bank. The bank should also facilitate customers' access to clear information regarding their protection, rights, and responsibilities. Furthermore, the bank must establish appropriate mechanisms to help customers develop knowledge related to the risks associated with the products the bank offers, enabling them to make suitable choices for their needs.

To achieve the objectives regarding the care of customers of banks operating in the Kingdom, the Saudi Central Bank issues these instructions, which constitute the minimum standards banks must comply with to achieve due care for customers.

Scope of Application

These rules apply to banks operating in the Kingdom and licensed by the Saudi Central Bank.

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Definitions

Term	Definition
Saudi Central Bank	The Saudi Central Bank.
Bank	Banks and institutions licensed to conduct banking business in the Kingdom in accordance with the provisions of the Bank Supervision System.
Management	Customer Care Department.
Customer	A natural or legal person to whom services and products are directed or who has obtained them from the bank.
Complaint	Any expression of dissatisfaction related to the provided service, whether justified or not, in writing or verbally.
Inquiry	A customer's request for information regarding services or products provided by the bank.
Request	A request submitted by a customer to obtain a product or service provided by the bank.
Electronic System	The bank's electronic system for registering complaints and inquiries.

Part One: Management Tasks, Policies, and Procedures

1-1 Establishment of the Management

1-1 The Management shall be established by a resolution of the bank's Board of Directors and shall report administratively directly to the highest executive position in the bank, whether the Chief Executive Officer, General Manager, or Managing Director. In the event of a temporary absence of this position: the reporting line shall be to the designated substitute, and it shall not be administratively linked to any other department within the bank.

2-1 The Management shall be granted the authorities, material and practical support, evaluation, and sufficient human resources to perform its assigned tasks with efficiency and high quality.

3-1 The Management must consist of at least three units (the bank shall determine the level of each unit based on its business volume and number of customers), namely: Complaints Processing Unit, Quality and Performance Analysis Unit, and Awareness and Financial Literacy Unit.

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4-1 Without prejudice to the provisions regarding appointment requirements for executive positions in private financial institutions under the supervision of the Saudi Central Bank, the bank must obtain a written non-objection from the Saudi Central Bank before appointing or assigning the Management Director.

2-1 Management Tasks

1-2 Protecting bank customers.
2-2 Efficiently and high-quality handling of customer complaints.
3-2 Responding to inquiries that may be received.
4-2 Enhancing customer satisfaction during complaint resolution.
5-2 Addressing the sources of complaint generation and minimizing them.
6-2 Raising the awareness level of bank customers regarding the products and services provided to them.
7-2 Developing and formulating policies and procedures in accordance with the best local and international practices in customer protection.

3-1 Management Policies and Work Procedures

1-3 The Management must develop the following policies:

• A policy for analyzing complaints and their errors, dealing with their causes and sources of generation (Root Cause Analysis), approved by the authorized person in the bank, and measuring its effectiveness in addressing recurring complaint sources.

• A policy specifically for protecting the rights of bank customers and caring for them through all stages of their interaction with the bank (e.g., marketing and sales procedures, post-sale service quality assurance procedures, complaint handling procedures, customer communication procedures, credit advisor service procedures).

• A policy specifically for the awareness and financial literacy of bank customers, aligned with the products and services the bank offers to customers. The policy must include at least the role of the employee responsible for providing a comprehensive explanation of the product or service, including all obligations associated with that service or product.

The Management (or its delegate) must have full authority to make an appropriate decision regarding a complaint not exceeding (20,000) SAR, and the bank must establish policies and procedures to regulate and monitor this.

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3-2 The Management must develop its operational mechanism with relevant departments and identify them periodically (at least once every sixty days), including service level agreements and escalation mechanisms to ensure complaints are resolved within regulatory timeframes. This mechanism must be activated at the executive level and include escalation to the highest executive level.

4-2 To ensure the efficiency and effectiveness of handling complaints, inquiries, and requests, the Management must include the following definitions in its internal policies for protecting customer rights and comply with them: (Complaint, Inquiry, Request, Customer), and they must align with the context of the definitions provided in these rules.

4-1 Management Staff and Employees

1-4 The bank must employ an appropriate number of staff in the Management and its units commensurate with the number of customers, products, and services provided by the bank and the volume of complaints, with a capacity analysis study conducted at least once annually.

2-4 The Director and staff of the Management must possess sufficient knowledge and experience in customer care, including holding at least the Professional Certificate in Retail Banking Fundamentals and the Professional Credit Advisor Certificate. The bank must invest in their qualification through appropriate training programs tailored to their work nature at least once annually. The bank must also ensure that Management staff are proficient in customer interaction skills, bank products and services, and the systems and instructions governing the nature of the relationship between customers and the bank.

Part Two: Management Units and Their Tasks

First: Complaints Processing Unit

1. The Unit must provide multiple channels for receiving and processing complaints efficiently and effectively, enabling customers to submit complaints according to their preference quickly and easily at suitable times. These channels must be clearly published on the bank's website homepage and its various platforms for the customer, and must include at least: a toll-free phone number, the website, mobile applications, email, and branches.

2. The Unit must have technical systems and programs that support documenting and tracking complaint resolution procedures with dates and times, allowing for the identification of their status and actions taken. These systems must provide at least the following:

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1-2 Registering complaints, documenting the receipt process, maintaining records, and tracking them through all processing stages, while providing the customer with a tracking number and the specified processing timeframe via SMS to their mobile number registered with the bank.

2-2 A feature allowing the customer to directly register a complaint in the electronic system and view the final result.

3-2 Tracking processing and any updates regarding it, and providing the customer with necessary documents (if required).

3-2 Categorizing complaints in the electronic system based on the products and services provided by the bank and in compliance with Saudi Central Bank instructions.

4-2 Enabling customers to automatically evaluate their satisfaction with the complaint resolution results.

5-2 Providing the ability to obtain verbal reports and automatically upload reports to the bank's senior management to monitor performance.

6-2 Providing the ability for direct automatic linkage to any databases established by the Saudi Central Bank for its supervisory and regulatory purposes.

3. The Complaints Processing Unit must resolve complaints within a period not exceeding (5) working days from the date of receipt from the customer.

4. The Unit must establish indicators to measure complaint resolution performance, and work to monitor these indicators and achieve the required target. The indicators must include at least the following:

Indicator Name	Indicator Description	Required Target*
Customer Satisfaction Rate with Complaint Resolution	Number of complaints where the customer provided a satisfied/satisfactory rating out of the total complaints	Not less than 85%
Compliance Rate with Service Level Agreement	Number of complaints the bank delayed in resolving within the regulatory period out of the total complaints	Not less than 95%

• The Saudi Central Bank may review and modify the indicator percentages mentioned above from time to time.

Second: Quality and Performance Analysis Unit

1. The Unit must review the quality of complaint resolution procedures and verify their efficient and high-quality handling in accordance with relevant systems and instructions, taking corrective actions regarding incorrectly resolved complaints and establishing necessary procedures to prevent recurrence.

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2. The Unit must continuously analyze complaint data and provide corrective plans to address the sources of complaint generation and measure their effectiveness. These reports must be documented and submitted to the Management Director for the purpose.

3. The Unit must ensure the accuracy of reports and the data contained therein.

4. The Unit must submit reports to the Management Director quarterly for submission to senior management and the Board of Directors, addressing customer care matters. These reports must include at least the following:

• Performance measurement indicators for complaints in the SAMA system.
• Performance measurement indicators for the bank's direct complaint resolution.
• The extent to which relevant departments comply with the service level agreement.
• Common complaints during the period.
• Challenges faced by the Management and the mechanism for addressing them.

Third: Awareness and Financial Literacy Unit

1. The Unit must continuously raise customer awareness through all available bank channels and implement annual awareness and financial literacy plans including at least: saving, financial planning, and reserves.

2. The Unit must continuously raise customer awareness through all complaint reception channels regarding their right to submit complaints and inquiries, and the possibility of requesting credit advisory services for customers, in cases where the bank is not obligated to provide credit advisory services.

3. Unit staff are prohibited from communicating with customers for the purpose of marketing products and services provided by the bank.

4. The Unit must submit semi-annual reports to the Management Director for submission to the Chief Executive Officer, including the following:

• Number of calls received by the Unit.
• Types of advisory services provided to customers.
• Measurement of customer satisfaction regarding the appropriateness of the advisory services provided to them.

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Final Provisions

1- These instructions are considered the minimum standard for what the bank must do to exercise due care for customers and efficiently and high-quality handle complaints and inquiries, and are closely linked to the principles and rules for protecting customers of financial institutions.

2- Without prejudice to the provisions in the Internal Audit Principles for Banks Operating in the Kingdom of Saudi Arabia, as well as the Compliance Principles for Banks and Commercial Institutions Operating in the Kingdom of Saudi Arabia; the Management must be subject to review and audit by the Internal Audit Department and Compliance Department annually.

3- The Management must obtain and annually renew the Customer Complaints Management System certification (ISO 10002), in addition to applying the international standard for measuring and monitoring customer satisfaction (ISO 10004).

4- These instructions replace the rules for establishing complaint units issued under Saudi Central Bank Circular No. (351...145194) dated 26/11/1435 AH.

5- All provisions of these instructions shall apply effective from 15/07/2023 CE.