1. Consumer Lending : Means loans to clients for purchasing tangible or intangible consumer goods (cars, furniture, real estate, medicines and the like) provided that they do not use these loans for commercial purposes and that repayment is in line with the borrower income. This does not include the financing of buying shares.

These loans are classified as follows :

1-1 Real estate loans (purchase, repair, furnishing et...)

1-2 Loans for purchasing cars, equipment and appliances.

1-3 Other personal loans, including all personal and consumer items that are not included in 1-1 and 1-2

2. Credit card loans : means the facilities granted through credit cards, excluding debit cards.

3. Loans to employees, which include :

3-1Loans to bank employees

    3-1-1 Employees of high management

    3-1-2 Other employees.

The employees of high management shall be defined according to the bank classification.

3-2Loans to the employees of private sector establishments and companies, as per specific agreements concluded by the bank and the private sector, whereby the salary of the employee is transferred to the bank, along with other procedures to guarantee repayment.

• The bank must provide SAMA, at the end of each fiscal year, of its policy regarding the calculation of doubtful personal and consumer loans, such as when is the loan considered doubtful and is written off.

• The bank must classify as "doubtful' all personal and consumer facilities, credit card loans or employee loans that fall 180 days behind their maturity date and transfer the commission thereon to an outstanding account.

• Before granting any such credit facilities the bank must make sure of the credit standing of the client through available means.

• The statement must be submitted quarterly within 10 days from the date of its preparation.

- The bank may ask for any adequate guarantees it deems fit to protect its rights, in accordance with applicable rules and regulations.

PERSONAL & CONSUMER LOANS

AS OF ........................................

(All Amounts in, 000)

Name ..............................

Title ..............................

Sig ...............................

Date ................................

Deputy Governor

BCS/727/13741

Date : 12/9/1418H

10 January 1998

Circular

From : Saudi Arabian Monetary Agency

To      : All Saudi Banks

Attn.  : Managing Directors and General Managers

Sub   : Exposure to South East Asian Countries

    In light of the present conditions in the financial markets in the South East Asian countries it is important that Saudi Banks monitor their exposures to counterparties from this region and develop strategies to manage and control their risks.

    In this regard SAMA requires that all Saudi Banks should provide it with a weekly update on their exposures to countries and counterparties in this region in the format attached, as Appendix I to this Circular.

    These reports are to be prepared as at the end of each week commencing Friday 9 January 1998 and should be submitted to SAMA by the following Sunday. This reporting will continue until further notice.

    If you need any further information please call Mr. Fahad Al-Mufarrij (466-2305)

Best Regards

Jammaz Al-Suhaimi

Appendix I

Format of Report on Exposure to South Asian Countries