Deduction and Default Rates
| No: 341000076474 | Date(g): 29/4/2013 | Date(h): 19/6/1434 |
Translated Document
Referring to SAMA's instructions regulating the process of deducting the installments of amounts due to borrowing customers, including the instructions issued within the regulations for consumer financing, and referring to SAMA's observation that some banks withhold the full salary of some defaulting customers, including employees and retirees, as a result of their failure to pay their financial obligations, and as the practices violate the instructions issued in this regard and may cause negative repercussions on the borrowing customer and his family.
We would like to emphasize the bank's responsibility to abide by these instructions in all cases and not to deduct the full salary for defaulters, and to reschedule the distressed amounts so that the monthly deduction rate does not exceed (33%) of the employee's salary and (25%) of the retiree's salary, and to reschedule the employee's premium upon his retirement to (25%) of the salary, and not to be exposed to any other amounts deposited in customers' accounts. In the event of receiving any complaint related to the seizure of the borrower's full monthly salary or the deduction of amounts deposited in his account, SAMA will take immediate and firm action against the violating banks.