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  • Second: Regulations for Standing Payment Order in Favor of a Financing Entity

    • A. Bank Obligations

       

      When offering a standing payment order in favor of a financing entity, banks must adhere to the following:
       1.Verify the existence of a fixed monthly income for the customer (such as a salary or equivalent) before accepting the request to establish a standing payment order in favor of the financing entity.
       
       2.Obtain the customer’s acknowledgment of their awareness of the consequences of establishing a standing payment order in favor of the financing entity, according to the acknowledgment form specified in the annex.
       
       3.Notify the customer upon establishing the standing payment order in favor of the financing entity via reliable means of communication, with the notification including, at a minimum, the following: the transfer amount, the date the order will begin, the duration in months, the account number to which the amount will be transferred monthly, and the name of the beneficiary financing entity.
       
       4.Execute the standing payment order for the full transfer amount on the due date or within five (5) days of the due date if the amount is not available on the specified date.
       
       5.Notify the customer if the standing payment order is not executed, providing the reason via reliable means of communication. 
       
       6.Obtain the beneficiary financing entity’s approval for the standing payment order or receive a clearance letter from the financing entity when the customer requests to amend or cancel the standing payment order.
       
       7.Ensure that the amount to be transferred from the customer’s account is not among the amounts that SAMA has confirmed should not be touched or deducted. Also, comply with the regulations related to account freezing, enforcement, and blocking bank accounts when creating or executing standing payment orders.

    • B. Obligations of the Beneficiary Financing Entity

      The beneficiary financing entity of a standing payment order must adhere to the following:
       1.Grant the customer approval to change the standing payment order amount when their circumstances change, leading to a rescheduling of the debt. This must be done within (3) working days from the completion of the rescheduling procedures by the financing entity.
       
       2.Provide the customer with a clearance letter and a no-objection certificate for cancelling the standing payment order within (7) working days from the date of the customer’s request in the following cases:
         a. Full repayment of the outstanding obligations.
       
         b. Exemption from the obligations as specified in the relevant instructions of SAMA, according to the applicable laws and regulations, or as stipulated in the contracts.
       
       3.Beneficiary financing entities may coordinate and reach prior agreements with each bank individually to obtain immediate notifications or periodic data reports that include details of the standing payment orders executed in their favor.
       
       4.Notify the customer upon receipt of the standing payment order amount via reliable means of communication.