Regulatory Alerts2016-12-20
Added · Updated
Circular to Banks Operating in the Kingdom
Banks operating in the Kingdom are required to stop deducting loan installments from customers' credit accounts before their salaries are received, except for attachment requests from competent authorities. Banks must implement technical measures to deduct installments only upon the borrower's salary arrival or on the date contractually agreed upon with the borrower. This directive is effective from the beginning of 2017.
In the name of God, the Most Gracious, the Most Merciful
Number: 14394 Date: 10 / 2 / 1438 AH Corresponding to: 7 / 11 / 2016 AD
Circular to Banks Operating in the Kingdom
Greetings,
Due to the receipt of a number of complaints regarding some banks operating in the Kingdom holding the value of installments due on loans granted to individuals from the credit accounts belonging to borrowing customers before the salary arrives, which causes confusion for the customer and restricts their freedom to dispose of their funds without legal justification, and which violates the simplest rules of treating customers with fairness and transparency.
I inform you of the necessity to stop holding any part of customers' credit accounts other than attachment requests received from competent authorities in accordance with the law and established procedures. Banks must take the necessary technical measures to deduct installments upon the borrower's salary arrival or on the date agreed upon with the borrower according to the signed contract.
What is stated above shall be effective from the beginning of 2017.
Please accept our highest regards,
The Governor Dr. Ziad Fariz
More like this from CBJ
CBJ published 1 document in the last 30 days. We email you each new one the day it's published.