Regulatory Alerts2022-10-02
Ensure that finance companies update their credit granting policies and procedures
The Saudi Central Bank requires finance companies and licensed crowdfunding entities to update their credit granting policies and procedures to align with rapid sector changes. The directive mandates the implementation of precautionary measures to curb rising non-performing loans and ensures that provisions and collateral remain commensurate with associated business risks. Issued under the Finance Companies Control System, this circular applies to all financing operations across the Kingdom.
Date: 1444/03/06 Reference No.: 44018254 Attachments:
Circular
To: Respected Companies, Peace, mercy and blessings of God be upon you,
Subject: Ensuring that finance companies update their credit granting policies and procedures.
Based on the powers granted to the Saudi Central Bank under the Finance Companies Control System and its Executive Regulations, and in light of its role in safeguarding the soundness and stability of the financial sector;
the Saudi Central Bank emphasizes that finance companies update their credit granting policies and procedures to align with the rapid changes in the financing sector and the activities being financed, and implement appropriate precautionary measures to limit the rise of non-performing loans. Furthermore, finance companies must verify the existence of provisions and collateral commensurate with the risk level associated with their business activities.
For your information and necessary action.
Yours sincerely, Yousef bin Ahmed Al-Sheikh Deputy Governor for Supervision
Distribution Scope:
- Finance companies operating in the Kingdom.
- Crowdfunding entities licensed by the Saudi Central Bank.