Regulatory Alerts2020-01-06
Rules on Management of Problem Loans
The Saudi Arabian Monetary Authority (SAMA) issued the Rules on Management of Problem Loans to establish a regulatory framework for identifying, preventing, and resolving non-performing loans for legal entities. The document mandates that banks implement robust early warning systems, develop board-approved NPL strategies, and maintain independent workout units with performance metrics aligned with fair treatment and viability assessments. These rules, effective from July 1, 2020, require strict adherence to defined procedures for restructuring, collateral management, and regulatory reporting to ensure financial stability and equitable customer treatment.
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