Section Three Credit Limits
Article 24
A Card Issuer is not permitted to increase a Credit limit of its Cardholder without receiving an Authenticated Communication from the Primary Cardholder seeking such an increase and according to the Regulations and circulars issued by Saudi Central Bank relating to Credit and Charge Cards. Any confirmation of such prior request by the Primary Cardholder must be documented. This Article does not apply to Charge Cards.
Article 25
When setting initial credit limits, a Card Issuer needs to consider:
a. The results of a debt burden analysis (the ratio of the Cardholder’s debt to his annual income).
b. Account behaviour information (on existing accounts) e.g. typical value of transactions; timeliness of repayments.
Article 26
A Card Issuer may not issue or permanently increase the Credit limit of an existing Credit or Charge Card without seeking the Cardholder’s Credit records from a Licensed Credit Information Bureau, and examining the credit record of the Cardholder to confirm the Cardholder’s solvency, repayment capacity and credit conduct.
Article 27
A Card Issuer is required to carry out proper risk management procedures including the use of Credit scoring models, delinquency behaviour etc., for issuance and for renewal of Credit or Charge Cards and to assign appropriate Credit limits to the Cardholder.
Article 28
The Card Issuer risk management procedures, together with their Credit scoring model, must be reviewed annually at a minimum or as directed by Saudi Central Bank. A fundamental part of this annual review must be the assessment of Cardholder account behavior delinquency.
Article 29
Where a Cardholder has not made the full minimum monthly repayment on 3 consecutive occasions the Card Issuer will immediately:
a) Freeze the account and treat it as a delinquent account.
b) Offer the Credit Advisory Services (regarding how to deal with financial difficulties) free of charge to the Cardholder, and
c) Work towards a mediated settlement before implementing collection and legal system against the Cardholder.
d) A Card Issuer must deal directly with a defaulting Cardholder during this time and can only hand over the case to an internal or external collection agency a minimum of one month after the date when the third consecutive defaulted monthly repayment has occurred. Thereafter and at all times, the Card Issuer must be available to directly offer Credit Advisory Services to the defaulted Cardholder.
Article 30
A Card Issuer is not allowed to lower the minimum monthly repayment required from its Cardholder below 5% of the outstanding balance on the Credit card account.
Article 31
Upon receipt of a request from a Cardholder seeking closure of the Credit or Charge Card account and upon receipt of full and final repayment of the Credit or Charge Card account, the Card Issuer is required to issue a no liability or clearance letter no more than one month from the date of full and final repayment of the outstanding amount and update the Cardholder’s record with any Licensed Credit Bureau within maximum of one week of closing the account.