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2019-11-12

Regulations for the Handling of Bankcard Refunds

The Saudi Central Bank issued this circular to mandate specific processing and settlement timelines for bankcard refunds across all domestic financial institutions. Credit card refunds must be processed within three business days from receipt in both acquirer and issuer systems, while direct debit (Mada) refunds require immediate processing upon receipt in both systems. Additionally, all institutions must send instant SMS notifications to customers immediately after crediting the refund amount to their respective accounts, with compliance effective from January 1, 2020.

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Saudi Arabia

Saudi Central Bank

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In the Name of Allah, the Most Gracious, the Most Merciful

Saudi Central Bank Headquarters

Banking Policy Department

No.: 17078/67 Date: 15/03/1441 AH Attachments: None

Circular

To the Esteemed,

Peace, mercy, and blessings of Allah be upon you,

Subject: Regulations for the Handling of Bankcard Refunds.

Pursuant to the Banking Control System issued by Royal Decree No. M/5 dated 22/02/1386 AH, and the powers granted to the Authority to apply the provisions of the Banking Control System pursuant to Resolution No. 2149/3 dated 14/10/1406 AH by the Minister of Finance, and with reference to the updated regulations for the issuance and operation of credit cards and monthly debit cards communicated via Circular No. 361000090389 dated 26/06/1436 AH, and the Authority's instructions communicated via Circular No. 1990/M.A.T/9006 dated 18/04/1432 AH regarding the provision of immediate automated notification services via short message service (SMS).

Please be advised that all banks and financial institutions operating in the Kingdom must, when processing bankcard refunds, comply with the following:

First: Credit Bankcards:

  1. Processing and settlement of incoming refund transactions within three business days from the date of receipt in the Acquirer Bank system.
  2. Processing and settlement of refund transactions on credit card accounts within three business days from the date of receipt in the Issuer Bank system.
  3. Notifying customers via short message service (SMS) immediately upon crediting the refund amount to the card account.

Second: Direct Debit Cards (Mada):

  1. Processing and settlement of incoming refund transactions immediately upon receipt in the Acquirer Bank system.
  2. Processing and settlement of refund transactions on the card account immediately upon receipt in the Issuer Bank system.
  3. Notifying customers via short message service (SMS) immediately upon crediting the refund amount to the card-linked account.

For your information, and to be effective as of 01/01/2020 AD.

Yours sincerely,

Fahd bin Ibrahim Al-Shathri Deputy Governor for Supervision

Distribution Scope:

  • Banks and financial institutions operating in the Kingdom.
  • Saudi Payments.

P.O. Box 2992, Riyadh 11169 | Telegram: MARKAZI | Telex: 404400 | Tel: 4633000 | Fax: 4662414

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