Regulatory Alerts2022-04-05
Added · Updated
Circular Re. The Instructions for Creditors on Dealing with Promissory Notes
The Saudi Central Bank mandates that supervised financial institutions adopt board-approved policies governing the handling of promissory notes, including strict procedures for communication with defaulting clients, documentation requirements for enforcement, and the return of notes upon settlement. Institutions are prohibited from initiating enforcement proceedings unless specific internal policy requirements are met and must bear liability for damages resulting from the enforcement of notes already paid in full. Additionally, financial entities must utilize the Ministry of Commerce's standard promissory note format, adhere to approved electronic platforms for digital notes, and submit a client communication plan for returning expired notes within one year of the circular's publication.
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