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.

1. These Regulations apply to all kinds of Consumer Financing.
2. These Regulations do not apply to lease or real estate Financing or margin lending.

1. For the purposes of these Regulations, Consumer Financing is granted under a Financing Contract in case of any of the following:
   1. The repayment of a debt owed by a person (the Borrower) to another (the Creditor) is deferred; or
   2. a person (Borrower) incurs a deferred debt to another (Creditor).
2. For the purpose of complying with Article 14(1), the Creditor must calculate the Amount of Financing based on the Borrower's Gross Salary or monthly pension entitlement (as the case may be) when the application for Financing is submitted.

1. A Financing Contract or Guarantee Agreement must be in the form of-
   1. a written contract document signed by the Borrower or Guarantor and the Creditor; or
   2. a written contract document signed by the Creditor and constituting an offer to the Borrower that is accepted in writing by the Borrower.
2. All Financing Contracts, application forms, Guarantee Agreements, repayment schedules, Borrower acknowledgement letter and other documentation related to Consumer Financing must be in Arabic and if the Borrower requests that documentation be prepared in English, the documentation shall be prepared in both languages. The Creditor must provide copies thereof to the Borrower. In the event of a divergence between the Arabic and the English text of any such document, the Arabic text prevails.
3. Each contracting party must receive a copy of the Financing Contract or Guarantee Agreement (as the case may be).

Any amendment (including any addition to) of a Financing Contract by the Creditor after it has been signed by the Borrower is invalid unless the Borrower has agreed in writing.

If a Financing Contract or Guarantee Agreement needed to be signed by the Borrower or Guarantor and returned to the Creditor, the Creditor must give each of the Borrower or Guarantor, as applicable, a signed copy they may keep, not later than 10 Calendar Days after the Financing Contract or Guarantee Agreement has been entered into.

1. The APR must include all mandatory charges or costs under a Consumer Financing as shown in the relevant advertising notices or materials.
2. The Financing Contract must stipulate the use of the declining balance method in distributing the Term Cost over the maturity period, which means that the Term Cost is allocated pro-rata to installments based on the remaining balance of the Amount of Financing at the beginning of the period for which an installment is due.
3. The Term Cost is fixed.

All fees, costs and administrative services charges to be recovered from the Borrower by the Creditor must not exceed the equivalent of (1%) of the Amount of Financing or (5,000) five thousand Saudi riyals, whichever is lower.

1. The Borrower may, by giving written notice to the Creditor within 10 Calendar Days from the date of execution of a Financing Contract, terminate the Financing Contract, unless
   1. Draw-down of any part of the Amount of Financing has occurred; or
   2. A credit card or other means of obtaining Financing provided to the Borrower by the Creditor has been used to acquire goods or services for which Financing is to be advanced under the Financing Contract.
2. In the event of termination under Article 10(1), the Creditor may not charge or claim any Term Cost and or fees from the Borrower unless the conditions under Article 10(1)(a) or (b) above have been met.

1. A Creditor must accept any payment under a Financing Contract before its due date as partial payment if it is equivalent to one full installment or multiples thereof.
2. A Creditor must credit each payment made under a Financing Contract to the Borrower's account promptly after receipt of such payment.
3. The Borrower may prepay, at any time, the remaining Amount of Financing without incurring any Term Cost for the remaining period. The Creditor is entitled to compensation from the Borrower for the following:
   1. The cost of re-investment, which may not exceed the Term Cost for the three months following the payment, calculated on the basis of a declining balance; and
   2. The expenses the Creditor pays to a third party as a consequence of the Financing Contract for the remaining period of the Consumer Financing if such expenses are unrecoverable, and provided that such expenses are properly recorded in the Borrower's Financing file.
4. The Creditor must notify the Borrower in writing of all such fees payable by the Borrower as referenced under Art. 11(3)(a)and (b) above. The Creditor must give that notification by Guaranteed Communication Means within 10 Business Days after the first to occur of:
   1. receipt by the Creditor of a notice from the Borrower of the intended prepayment; or
   2. receipt by the Creditor of the prepayment,

1. Creditors must quickly facilitate the transfer of balance(s) to other Creditors in the Consumer Financing accounts of their Borrowers. Creditors must not unreasonably withhold their consent to a balance transfer request they receive.
2. Creditors may not unreasonably withhold the issuance of a balance statement or certificate of outstanding liabilities requested by the Borrower; these must be issued within 7 Business Days from the date of request.

1. If the Creditor assigns rights under a Financing Contract or the Financing Contract itself to a third party or issues securities against rights under the Financing Contract, the Borrower may use against the assignee any defense that would have been available to him against the original Creditor.
2. The Creditor must receive a no-objection letter from SAMA before he can assign a Consumer Financing or a portfolio of Consumer Financings to another party.

1. Before granting a new Consumer Financing or increasing the limit of any Consumer Financing and without prejudice to the requirements of any applicable law or regulation, a Creditor must ensure that the total monthly Repayments or Deductions recovered from a Borrower under his Consumer Financing obligations to all Creditors do not exceed 33.33% of the Borrower's Gross Salary during the period in which those Repayments or Deductions are made. For retired Borrowers, the deduction limit is 25% of their monthly pension.
2. The Creditor must first obtain the Borrower's prior approval and then obtain and examine the credit record of the Borrower from one or more of the Licensed Credit Bureaus, to confirm the Borrower's compliance with the requirement under Article 14(1), his solvency, repayment capacity and credit conduct. The confirmation of such prior approval by the Borrower must be documented in the Borrower's Financing file.
3. The Creditor must, upon the approval of the Borrower, register the Borrower's credit information with one or more of the Licensed Credit Bureaus in accordance with the relevant laws, regulations and instructions. Such information shall be updated throughout the period of dealing with the Borrower.
4. The Creditor must decline a Financing request if he does not obtain the approval of the Borrower as referred to in Article 14(2) and 14(3) above.
5. Creditors must ensure that the maximum Term to Maturity of a Consumer Financing does not exceed 5 years from the date of initial disbursement.
6. *In the event of a Change in Circumstance of the Borrower, Creditors may reschedule the repayment terms of the Consumer Financing (provided no new Financing is being granted and without any change to the Term Cost under the original Financing Contract) in accordance their credit policies. Creditors must provide SAMA with a half-yearly report of all Consumer Financings that have been rescheduled.
7. In calculating the maximum deductions of one third (33.33%) for Borrowers and one fourth (25%) for pensioners, Creditors must include all Consumer Financing Repayments or Deductions, including the minimum monthly payment required for all credit cards issued to the Borrower.

*Article 14(6) has been amended in accordance to Circular No (381000095088) dated 10/09/1438H. The amended article is currently available only in Arabic.

1. Consumer Financing granted on the basis of any security other than the deduction of salary or pension payments (e.g. against lien of deposits or assignment of other regular earnings or pledge of collateral) is not subject to the provisions under Article 14(1).
2. A Creditor must carry out proper risk management procedures such as the use of credit scoring models for the granting or renewal of all Consumer Financings and must assign appropriate credit limits to its Borrowers.
3. Prior to granting a new Consumer Financing, a Creditor must have received a Borrower request through Authenticated Communication or the execution of a Financing Contract. A Creditor may not increase the Financing limit of its Borrower without receiving a request through Authenticated Communication from its Borrower seeking such an increase. Each such increase/amendment in the Financing Contract requires execution of a new Financing Contract.
4. Creditors are required to obtain knowledge of the purpose of the Consumer Financing from the Borrower and document that. This confirmation must be a part of a written acknowledgment by the Borrower clearly stating that he has fully understood the terms and conditions and confirms the execution of the respective Financing Contract.
5. Creditors are only allowed to refinance Consumer Financing accounts of those Borrowers who have repaid at least 20% of their original Amount of Financing under their Consumer Financing account.
6. Creditors refinancing the Consumer Financing accounts of their Borrowers must fully comply with the disclosure requirements under Section 5, Additionally, the Borrower must be provided with a break-down of the refinanced amount, clearly identifying the refinanced amount that will credited to his/her account, net of all identified fees and charges and the settlement of the original outstanding balance prior to a Refinancing.
7. Borrowers opting for early retirement are required to ensure that their pension payments continue to be routed to the Creditor in the event of outstanding balances under their Consumer Financing account. A Creditor may require a suitable undertaking from the Borrower affirming the foregoing arrangement.
8. Additional features or services requiring additional payment of fees and charges which are optional to the primary product features of the Consumer Financing may not be added on or embedded into the Consumer Financing account and must be clearly represented as an Optional Feature. A Borrower must have indicated his/her desire to obtain such services by Authenticated Communication before their inclusion in the account. Creditors must also clearly disclose all fees and charges for these services to the Borrower within their offer for such Optional Features.
9. A Creditor must promptly advise its Borrowers of the following amendments and or changes in their Financing Contract by giving them at least 30 Calendar Days prior written notice:

            (a) any increase of the annual fees and/or handling fees charged to the Borrower;

            (b) an increase in recurring fees or charges

            (c) any new fees or charges.

            (d) any other changes.

10. The Borrower may terminate the relevant Financing Contract with the Creditor if he/she does not agree to such amendment, change or modification by notifying the Creditor of his/her desire to terminate the Financing Contract within ten (10) Calendar Days after his/her receipt through Authenticated Communication of the notification of the aforementioned changes, subject to full settlement of all outstanding balances on the Consumer Financing account. The aforementioned notice must advise Borrowers of the 10 Calendar Day termination period.
11. A Creditor engaging in Outsourcing any component of its Consumer Financing Business must comply with the Rules on Outsourcing issued by SAMA.
12. A Creditor is required to implement a clearly defined Code of Conduct for employees engaged in roles involving sales and marketing of Consumer Financing products and follow-up and collection of impaired and delinquent Consumer Financing Accounts. (Creditors are also required to be in compliance with SAMA circular MAT/8211 dated 1/4/1431H.) A Creditor must provide those employees with a copy of the Code of Conduct and obtain their acknowledgement of receipt. The Code of Conduct must prohibit the following:

13. Creditors are required to have structured training programs for all new staff and Consumer Financing product knowledge programs for staff involved in marketing and sales and customer service for Consumer Financing products.
14. A Creditor must issue procedural rules to handle Borrower complaints relating to Consumer Financings and to ensure that Borrowers are made aware of the procedure and contact details of the complaint handling unit/department.
15. If a Borrowers' application for any Financing facility is declined, the Creditor must provide the Borrower with a written reason for the rejection through Guaranteed Communication Means.
16. Upon full and final repayment of the Consumer Financing by the Borrower, the Creditor is required to issue a no liability or clearance letter within 7 Business Days from the date of full and final settlement und update his record with a Licensed Credit Bureau.

1. A Creditor may only proceed to enforcement against a Guarantor if the Borrower is in Default and has failed to comply with a Default Notice for a period of not less than 30 Calendar Days from the date of receipt.
2. Creditors, their representatives, and any other assignees of the Creditor's rights under the Financing Contract or Guarantee Agreement may not take disproportionate, excessive or unreasonable measures to recover amounts due to them in the event of non-performance of aforementioned agreements
3. A Creditor may demand immediate repayment in the event of Default only through a Default Notice requesting the Borrower, or where applicable, the Guarantor to comply with his/her obligations under the Agreement within 30 Calendar Days from the date of the issuance of notice.
4. A Default Notice is not required in the event of any of the following:

5. A Creditor may suspend Draw-downs under a Financing Contract in the event of a failure by either the Borrower or the Guarantor to abide by its terms and conditions in a Default. However the Creditor is required to give notice of its intent to suspend Draw-downs to the Borrower and the Guarantor (if any) without delay.
6. A Creditor is required to provide without delay and upon request of the Borrower, a detailed statement of account incorporating all applicable fees, Term Cost and charges including any administrative charges, free of charge in the event of a Default or prepayment of the Consumer Financing.
7. A Creditor may not bring an action for the enforcement of security over goods pledged as collateral without first obtaining approval from the Committee for Settlement of Banking Disputes if:

1. The Creditor must indicate in all product advertisements its name, logo, any identifying representation and contact details.
2. The advertisement must disclose, in a manner that is clear to the Borrower, the name and Annual Percentage Rate of the advertised product and shall not include other rates such as the Term Cost.
3. The Creditor may not do any of the following:

4. SAMA may require any Creditor who does not abide by the provisions of this Article to withdraw the advertisement within one Business Day of notice SAMA from to that effect.
5. Furthermore, SAMA may take other punitive actions as required.

A Creditor is required to provide the Borrower in writing with the Initial Disclosure information stated in Article 21 below. The Initial Disclosure must be made in clear and easy-to-read language duly highlighting terms and conditions which may affect the Borrower's rights and obligations, and the Creditor must use any format specified by SAMA from time for that purpose. Furthermore, the specific terms contained under Article 21 (1) (b) and (c) and information on the Total Cost of Financing must be included in the Initial Disclosure statement.

1. For the purpose of these Regulations, a Creditor must provide the Borrower with a written disclosure statement that provides the information required by these Regulations to be disclosed.
2. A disclosure statement may be part of a Financing Contract or an application for a Consumer Financing or may be an annex to the foregoing documents.
3. The Creditor is required to obtain written acknowledgement from the Borrower confirming he/she has received and read the Initial Disclosure statement.
4. Information disclosed in a disclosure statement may be based on a reasonable assumption or estimate and such information must be clearly identified to the Borrower as an assumption or estimate.
5. A disclosure statement, or consent in relation to a disclosure statement, must be in plain, clear and concise language. It must be presented in a manner that is logical and likely to bring to the Borrower's attention the information required by these Regulations to be disclosed.
6. If the Borrower consents by Authenticated Communication, the disclosure statement may be provided by electronic means in an electronic form that the Borrower can retrieve and retain.
7. A disclosure statement is deemed to be provided to the Borrower:

A Creditor that proposes to enter into a Financing Contract with a Borrower must provide the Borrower with the Initial Disclosure statement required by these Regulations prior to or upon entering into the Financing Contract by the Borrower and the Creditor.

1. A Creditor that enters into a Financing Contract with a Borrower must provide the Borrower with an Initial Disclosure statement that includes the following information:

2. If the initial limit of the Financing is not known when the Initial Disclosure statement is made, the Creditor must disclose it in:

3. If a Financing Contract is amended, the Creditor must, in writing and within 30 Calendar Days or more before the amendment takes effect, disclose to the Borrower and Guarantor (if any), any changes to the agreement pertaining to items referred to under Article 21(1) except changes to the following:

4. An amendment referred to in Article 21(3) must be disclosed in the first statement that is provided to the Borrower after the amendment is made.
5. If a Creditor offers to defer or skip a payment or installment under a Financing Contract, the Creditor must, with the offer, disclose in a prominent manner whether Term Cost will continue to accrue during any period covered by the offer if the offer is accepted. Creditors must ensure compliance with Article 14(5), i.e. the maximum Term to Maturity may not exceed 5 years.

1. A Creditor must deliver at least on a quarterly basis to each Borrower a statement of his/her Consumer Financing transaction amounts in writing or through electronic medium (such as e-statement) as agreed with the Borrower in advance. The account statement should fully disclose the following information:

2. The address for notification of account statement errors: The address or telephone number to be used for notification of account statement errors or any other enquiries that a Borrower may have on the account statement.
3. The time period allowed to the Borrower to verify the accuracy of transactions as annotated in the account statement after which the account statement is binding: This period shall not be less than 30 Calendar Days as of the date of sending the statement via Guaranteed Communication Means
4. The Saudi Riyal shall be used as a basis for calculating all transactions and charges of Consumer Financing, and it shall be used in all disclosures of monetary values for Consumer Financing accounts denominated in Saudi Riyal. For Consumer Financing accounts denominated in currencies other than Saudi Riyal, the basis for calculation will be their respective currency of account.
5. If the Creditor wants to change the charges related to the Consumer Financing account or the method of paying due amounts, it must notify the Borrower of such change within a period of at least 60 Calendar Days prior to its application. The notice shall be mailed or delivered by Guaranteed Communication Means to the address on record of the Borrower.
6. The Borrower is required to keep the Creditor's records updated with his/her latest address and to immediately notify the Creditor of any change in his/her contact details in writing or by Authenticated Communication. Failure to provide this information will release the Creditor from any liabilities and obligations under Article 22.5 above.

1. The term “account statement error/dispute” means any transaction posted to the Borrower's Consumer Financing account, resulting in an error in the overall balance. Account statement errors shall include the following:

2. The term “notice of account statement error”/dispute means a written notification given by a Borrower to the Creditor, using the contact information as included within the said account statement or other information supplied by the Creditor, and it must meet the following requirements:

3. The Creditor must address account statement errors/disputes as follows:

4. If the account statement error/dispute has not been Satisfactorily Resolved, the Borrower shall not be obliged to pay the portion of the required payment that the Borrower believes is related to the disputed amount, including Term Cost or any other charges. The Creditor may not try to collect any amount, Term Cost or other charges related to the account statement error/dispute until the dispute is Satisfactorily Resolved.
5. The Creditor must not make or threaten to make an improper report about the Borrower's credit standing, or report that an amount or account is delinquent prior to the error/dispute being Satisfactorily Resolved, because the Borrower did not pay the disputed amount or relevant Term Cost or other charges during the error/dispute resolution process in any event, not earlier than 90 Calendar Days from the date of the notice of account statement error/dispute.
6. If the Creditor determines that an account statement error has occurred as stated by the Borrower, it must correct the error and pay back any disputed amount and relevant Term Cost and other charges debited on the Borrower's account and deliver by Guaranteed Communication means a correction notice to the Borrower.
7. If the Creditor determines that a different account statement error other than the one identified in the Borrower’s notice has occurred, the Creditor must mail or deliver by Guaranteed Communication Means to the Borrower the Creditor's reasons for believing that a different account statement error has occurred and the reasons for the belief that the error alleged by the Borrower is incorrect. The Creditor shall correct the error and credit the Borrower’s account with the correct amount in accordance with procedures in force.
8. If the Creditor determines that no account statement error has occurred, it must mail or deliver by Guaranteed Communication Means to the Borrower an explanation of the reasons of believing that the error alleged by the Borrower is incorrect and provide the Borrower with copies of any documented evidence if he/she so requests.
9. If the Creditor believes that a Borrower is liable for all or part of the disputed amount and relevant Term Cost and other charges, it must:

10. Without prejudice to applicable law and regulation, a Creditor that has fully complied with the requirements of this section shall not have further responsibilities under this section if the Borrower insists on his/her claim.
11. The Committee for Settlement of Banking Disputes is the final authority in resolving any unresolved disputes between the Borrower and the Creditor.
12. These Regulations are issued in Arabic and English. In the event of a conflict between the two versions of these Regulations, the Arabic version prevails.