Section 1: Introduction, Purpose and Definitions
Introduction
SAMA is the authority responsible for monitoring and supervising the financial institutions licensed by it. SAMA has regulatory powers, including framing and regulating the rights of financial institutions’ costumers, based on the SAMA Law issued by Royal Decree No. M/36 dated 11/04/1442H and its amendments as well as Article (4) of the Law which states that “SAMA shall carry out its duties according to the provisions of the Law, the regulations and policies issued by the Board, and in line with international best standards and practices. The Bank shall have all powers necessary to be able to achieve its objectives and carry out its duties. To this end, SAMA may exercise the following duties, powers and responsibilities: (9) developing instructions and procedures that would protect the consumers of financial institutions.” This is also based on the Banking Control Law issued by Royal Decree M/5 dated 22/02/1386H and its amendments, granting SAMA the authority to determine the procedures and conditions that banks must follow when dealing with consumers, in addition to the provisions in the Cooperative Insurance Companies Control Law issued Royal Decree No. M/32 dated 02/06/1424H and its amendments regarding SAMA’s powers to set the rules and controls that guarantee the rights of beneficiaries. The Finance Companies Control Law issued by Royal Decree No. M/51 dated 13/08/1433H and its amendments and regulations include the necessary rules to protect transactions, ensure their fairness, and protect the rights of consumers. Moreover, the Credit Information Law issued under Royal Decree No. M/37 dated 05/07/1429H and its regulations are aimed at regulating consumer rights in the credit information sector, and one of the goals of the Law of Payments and Payment Services issued by Royal Decree M/26 dated 22/03/1443H is to enhance the protection of the rights of parties dealing with payment systems and payment service providers.
Purpose
1. To establish the principle of financial consumer protection and keep abreast of the instructions issued internationally, namely the High-Level Principles on Financial Consumer Protection.
2. To ensure that consumers of financial institutions supervised by SAMA are treated with transparency, honesty and fairness.
3. To ensure that consumers can easily obtain financial services and products at reasonable costs and with high quality.
Definitions
The following terms and phrases, wherever mentioned in this document, shall have the meanings assigned to them unless the context otherwise requires:
Saudi Arabia The Kingdom of Saudi Arabia. SAMA The Saudi Central Bank*. Financial institution An entity supervised and regulated by SAMA according to the applicable laws. Bank Any natural or juristic person that is basically practicing any of the banking business in Saudi Arabia and is licensed according to the provisions of the Banking Control Law. Finance company A joint stock company licensed to engage in finance activities according to the Finance Companies Control Law. Insurance company A joint stock company conducting insurance and/or reinsurance activities according to the Insurance Companies Control Law. Payments institutions Payment service providers licensed by SAMA according to the Law of Payments and Payment Services. Remittance service providers Financial institutions providing remittance services under the license issued by SAMA. Credit and charge card issuers Financial institutions licensed to issue credit and charge cards in Saudi Arabia. Credit bureaus Companies licensed to collect and maintain credit information on consumers and provide the same to members upon request according to the Credit Information Law. Credit record A report issued by a credit bureau containing consumer credit information. Conflict of interest A situation in which the objectivity and independence of a financial institution or any of its employees is adversely affected during the performance of tasks in pursuit of its own interests or the interests of any of its employees, in a manner that violates justice, fairness, integrity and responsibility to consumers. Consumer A natural person who is a beneficiary of products and services provided by licensed financial institutions. Complaint Any expression, written or verbal, entailing dissatisfaction with the provided services, whether such dissatisfaction is justified or not. Complaint resolution When a financial institution reaches a final outcome regarding the consumer's complaint by following the measures and procedures necessary to settle the complaint fairly and effectively within the specified time period. Inquiries A consumer’s inquiries about products and services provided by a financial institution. Requests A consumer’s request to obtain products or services provided by a financial institution. Clearance letter An official statement issued by the financial institution confirming that the consumer has no financial liabilities related to a product or a service previously obtained by the consumer. Employees Individuals responsible for providing services and products offered by the financial institution, including all employees, whether directly contracted or outsourced. Error An act violating the documented policy and work procedures, which has a financial effect and/or a breach of the statutory or regulatory rights of one or more consumers. Outsourcing An arrangement with a third party that the financial institution contracts with to provide a service on its behalf. Documented channels A recorded and verifiable contact method that can be retrieved in written or electronic format. Day Any calendar day including weekends and holidays. Business day Any calendar day excluding weekends and holidays. Third party An entity that is assigned an activity to perform on behalf of the financial institution. * The Saudi Arabian Monetary Agency was replaced by the name of Saudi Central Bank in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding 26/11/2020AD.