Regulatory Alerts2018-05-17
Added · Updated
Circular Re. Responsible Lending Principles for Individual Customers
The Saudi Central Bank mandates that banks and financing companies comply with the Responsible Lending Principles for Individual Customers by July 1, 1439H (August 12, 2018). The rules impose specific debt-to-income ratio caps based on monthly income: for customers earning 15,000 SAR or less, total monthly credit obligations cannot exceed 55% of gross income, with stricter limits for salary deductions and pensioners; for those earning between 15,000 and 25,000 SAR, the total cap is raised to 65%. The document also defines calculation methodologies for monthly obligations and gross income, prohibits counting government subsidies in gross income, and requires lenders to assess affordability and maintain detailed records.