Each of the following words and phrases, wherever it appears in this Regulation, shall have the meaning following it in this article unless the context indicates otherwise:

Adequate notice: a printed notice to a Borrower that sets forth clearly the pertinent facts so that the Borrower may reasonably be expected to have noticed it and understood its meaning. The notice may be given by Guaranteed Communication Means reasonably assuring receipt by the Borrower.

Advertisement: a commercial message in any medium that promotes, directly or indirectly, a Financing product.

Amount of Financing: the limit or the total amount made available to a Borrower under a Financing Contract.

Annual Percentage Rate or APR: the discount rate at which the present value of all payments and installments that are due from the Borrower, representing the Total Amount Payable by the Borrower, equals the present value of all payments of the Amount of Financing available to the Borrower on the date on which the Financing amount or the first payment thereof is available to the Borrower, calculated in accordance with Annex 1.

Authenticated Communication: Borrower instructions received through a recorded, verifiable and retrievable medium such as paper, electronic or verbal recording.

Borrower: a natural person who, in Financing transactions covered by this Regulation, obtains Financing for purposes outside his trade or profession.

Business Day: a day on which the banks are open for business to the general public.

Calendar Day: any day in a month, including weekends and holidays.

Change in Circumstance: death, disability (partial or total), retirement (mandatory or voluntary), loss of job or bankruptcy of a Borrower*.

Consumer Financing: a Financing granted to a Borrower as follows:

1. The Financing is for purposes unconnected with the Borrower’s commercial or professional activity, generally including personal Financing, car Financing, home improvement Financing, and similar products as approved by SAMA.
2. Such Financing is granted for the purchase of goods and services for consumption or other needs of the Borrower as identified above, e.g. for the purchase of furniture, consumer durables, automobiles, household items, education, etc.
3. Real estate Financing and Finance Leasing are excluded.
4. Financing against shares (Margin Lending) is also excluded.

Creditor: a bank licensed and authorized by the Saudi Central Bank.

Default: any breach of the terms and conditions of the Financing Contract and the nonpayment by a Borrower of their monthly installment for 90 Calendar Days from its due date.

Default Notice: a notice from a Creditor to a Borrower under a Financing Contract with the Creditor notifying that he/she is delinquent in payments.

Draw-down: an Amount of Financing drawn by the Borrower under a Financing Contract.

Financing: the right to incur new debt and defer payment, or the right to defer existing debt.

Financing Contract: an agreement by which a Creditor grants, or promises to grant, a Consumer Financing or similar financial accommodation to a Borrower.

Gross Salary basic monthly salary (less GOSI and pensions contributions) plus all fixed allowances paid to Borrower by the employer on a monthly basis.

Guarantee Agreement: an ancillary agreement concluded by a Guarantor and guaranteeing or promising to guarantee the fulfillment of any form of Financing granted to a Borrower.

Guaranteed Communication Means: registered mail, hand delivery, and any recorded, verifiable and retrievable electronic medium.

Guarantor: a natural person who guarantees or promises to guarantee the fulfillment of any Financing granted to a Borrower.

Initial Disclosure: the information required to be provided to the Borrower by a Creditor upon opening a Consumer Financing account in accordance with Section 5 of these Regulations.

Licensed Credit Bureau: a credit information company licensed by SAMA to collect and maintain credit information on consumers and provide the same to members upon request.

Optional Feature: features and services which are not part of the standard features or services of the Financing Contract product, requiring payment of additional fees and/or Term Cost by the Borrower.

Outsourcing: an arrangement under which a third party (i.e. a service provider) undertakes to provide a Creditor with a service previously carried out by the Creditor itself or a new service to be launched by the Creditor. Outsourcing can be to a service provider in Saudi Arabia or overseas and the service provider may be a unit of the same Creditor (e.g. head office or an overseas branch), an affiliated company of the Creditor's group or an independent third party, and is subject to the requirement to fully comply with SAMA Rules on Outsourcing issued vide 34720/BCS/424 dated 17/7/1429H Correspondent to 20/7/2008.

Refinancing: repayment of an existing Financing from the proceeds of a new Financing granted to the Borrower.

Repayments or Deductions: deductions from the Gross Salary or monthly pension entitlement of a Borrower towards repayment of Financing. Only deductions for Real Estate Financing repayments and divorce settlements are excluded.

SAMA: the Saudi Central bank**.

Satisfactorily Resolved: resolution of the dispute in accordance with the procedures and timeframes for resolving disputes.

Secured Financing: a Financing that is collateralized by assignment of rights to property including a security interest in personal property or real estate taken by the Creditor as collateral. A Financing may be secured by pledge of cash (deposits), tangible goods or other collateral.

Term Cost: the term cost due and payable by the Borrower under the Financing Contract; this must be expressed as a fixed annual percentage of the Amount of Financing obtained by the Borrower.

Term to Maturity: the period from initial disbursement to the date on which the final repayment of the relevant Financing is due.

Total Cost of Financing: all costs payable by the Borrower under a Financing Contract other than the Amount of Financing, including Term Cost, fees, commissions, administrative services fees, insurance, and any charges required to obtain Financing, but excluding any expenses the Borrower can avoid, such as costs or fees due and payable by the Borrower as a result of the Borrower's breach of any obligations contained in the Financing Contract.

Total Amount Payable by the Borrower: the Amount of Financing plus the Total Cost of Financing. 

*The definition of "Change in Circumstance" has been amended in accordance with Circular No (381000095088) dated 10/09/1438H. The amended definition is currently available only in Arabic.

** The "Saudi Arabian Monetary Agency" was replaced By the "Saudi Central Bank" in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding in 26/11/2020G.