3. The financing entity must establish a policy approved by the Board of Directors for handling promissory notes, which must include, at a minimum, the following:

3.1. Procedures to be followed before initiating enforcement actions on a promissory note

A. Identifying the department responsible for communicating with the defaulting client, without prejudicing the communication mechanisms outlined in the related SAMA instructions.

B. Designating the authorized individual responsible for approving the initiation of enforcement actions on the promissory note before the competent court.

3.2. Procedures to be followed when initiating enforcement actions on a promissory note

a. Identifying the necessary documents for enforcing a promissory note, which must include, at a minimum: (the financing contract under which the promissory note was issued, the promissory note due for payment, evidence of the client's default, and proof of communication with the defaulting client).

b. Designating the department responsible for carrying out the enforcement procedures on the promissory note before the competent court.

c. If enforcement tasks are assigned to a third party, the financing entity must adhere to the related SAMA instructions.

d. Identifying the department responsible for coordinating with the third party regarding the enforcement of the promissory note and ensuring their compliance with relevant laws, regulations, and instructions.

e. Limiting the claim under the promissory note to the amount due from the defaulting client according to the relationship documents and account statements when filing for enforcement before the competent court.

3.3. Procedures to be followed upon the completion of the purpose of the promissory note:

a. The authorized individual must directly endorse the promissory note to indicate that its value has been settled, for the purpose of returning it to the client.

b. The responsible department must directly contact the client through a documented communication method to return the promissory note.

c. The promissory note should be returned to the client either in person at the financing entity’s office or by sending it to the client's national address upon request. The costs of sending the note may be charged to the client if delivery is requested, with the client’s request being documented.

d. If the client does not respond or cannot be reached to receive the completed promissory note, the financing entity should endorse the note to indicate that the client has settled its value and keep it in the client’s file. Additionally, the entity must attach proof of communication attempts with the client without response and ensure that the note is returned to the client upon request.

e. In the case of renewing the relationship with the client or modifying the loan or facility, the financing entity must return the original promissory note or notes related to the renewed or modified contract to the client and obtain a new promissory note or notes in light of the new relationship.

4. Enforcement actions on a promissory note before the competent court may only be initiated after fulfilling the requirements specified in the policy referenced in Section (3) of these instructions.
5. The financing entity shall be liable for any damages incurred by the client due to the enforcement of a promissory note that the client has already settled.
6. The financing entity must adhere to the model format for promissory notes prepared by the Ministry of Commerce, as issued under SAMA Circular No. (6876/BC/213) dated 09/06/1410 H.
7. When issuing an electronic promissory note, the financing entity must use the approved electronic platforms.
8. SAMA reserves the right to take any actions stipulated in the Banking Control Law and the Finance Companies Control Law and its implementing regulations against a financing entity that does not comply with these instructions.
9. The financing entity must develop a plan for communicating with clients to return promissory notes that have fulfilled their purpose. This plan should be implemented within one year from the date of publication of these instructions and SAMA should be informed upon its completion.
10. SAMA has the authority to amend and update these instructions as needed.