Regulatory Alerts2020-01-06
Rules on Management of Problem Loans
The Saudi Arabian Monetary Authority (SAMA) has issued the Rules on Management of Problem Loans to mandate licensed banks in Saudi Arabia to establish robust frameworks for identifying, preventing, and restructuring non-performing loans. The regulations require banks to implement comprehensive early warning signals, develop board-approved NPL strategies, and maintain independent workout units with performance metrics aligned to fair customer treatment. Furthermore, the rules standardize viability assessments, restructuring codes of conduct, collateral governance, and regulatory reporting to ensure timely resolution of stressed assets while supporting broader economic stability.
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