Regulatory Alerts2018-03-29
Ensuring Equality Among Community Groups in Financing Products and Insurance Coverage for Financing Lease Contracts
The Saudi Central Bank issued this circular to mandate that all banks and financing companies operating in the Kingdom must not discriminate against customers based on the age of the actual user of a financed leased vehicle. Building on a prior directive to insurance providers, this directive explicitly extends the prohibition of age-based refusal of mandatory and comprehensive vehicle insurance coverage to the financing sector itself. Financial institutions are required to align their financing products and insurance coverage practices with the Principles for the Protection of Bank Customers and Financing Company Customers to ensure fair, transparent, and non-discriminatory service delivery.
In the Name of Allah, the Most Gracious, the Most Merciful Saudi Central Bank Headquarters
General Directorate of Supervision of Financing Companies Ref. No.: .................................... Date: 1439/07/12 Attachments: ....................................
Circular
Dear Sirs/Madam: ....................................................................
Peace, mercy, and blessings of Allah be upon you,
Subject: Ensuring Equality Among Community Groups in Financing Products and Insurance Coverage for Financing Lease Contracts.
In light of the Bank's regulatory and supervisory role over the banking and financing companies sectors, and its commitment to ensuring that all segments of society obtain the financial services and products they need at reasonable costs, in a fair and transparent manner, and without discrimination, based on Principle (1/5) of the Principles for the Protection of Bank Customers and Principle (1/4) of the Principles for the Protection of Financing Company Customers. Furthermore, with reference to the Circular issued by the Bank under Ref. No. (T.A.M/157/2018) dated 2018/3/15 to all insurance companies regarding insurance coverage for the actual user in car leasing and financing leases, which prohibits all insurance companies operating in vehicle insurance from refusing insurance coverage for mandatory vehicle insurance or comprehensive insurance due to the age of the actual user of the financed leased vehicle.
Accordingly, the Bank wishes to emphasize that all banks and financing companies must not discriminate between customers due to the age of the actual user of the financed leased vehicle.
For your information and necessary action.
Yours sincerely,
Ahmed bin Abdullah Al Sheikh Deputy Governor for Supervision
Distribution Scope:
- Banks and financial institutions operating in the Kingdom.
- Financing companies operating in the Kingdom.
P.O. Box 2992, Riyadh 11169, Phone: +966 11 4662020, Fax: +966 11 4662488