Further to SAMA Circular No. 19404/BCS/377 dated 07/05/1428 H supplementary to Circular No. 19838/BCS/250 dated 10/09/1424 H regarding the desire to overcome all obstacles facing the Real Estate Development Fund in collecting its dues from borrowers in order to achieve the Fund's development goals and to continue serving the community through the following:

1. Accept the deduction forms issued by the Fund, emphasizing the need for the borrower to sign the bank's forms for debiting from his account.
2. Confirmation to stop deducting any commissions for the transfer process from clients' accounts to the Fund's account.

      Whereas, SAMA received the letter of His Excellency the Minister of Housing and Chairman of the Board of Directors of the Real Estate Development Fund No. 8657/35701 dated 08/03/1435 H, which includes His Excellency's statement that some banks have suspended the monthly deduction from the borrower's account in favor of the Fund at the request of the borrower without referring to the Fund.

     Accordingly, SAMA stresses the need to adhere to the mandatory monthly deduction from the borrowers' accounts in favor of the Fund until the end of the debt or receiving a letter from the Fund approving the suspension of the deduction. And abide by the contents of SAMA Circular No. 351000019897 dated 14/02/1435 H in terms of emphasizing the processing of monthly installments due from borrowers of the real estate development fund in accordance with the Fund's letters received by the Bank in this regard.

     For your information and briefing within ten days from its date.

Based on the powers vested to SAMA pursuant to The Saudi Central Bank Law issued by Royal Decree No. (M/36) dated 11/04/1442 H , according to the relevant regulations, and to Responsible Lending Principles for Individual Customers, issued pursuant to Circular No. (46538/99) dated 02/09/1439 H, and amended by Circular No. (1/40694) dated 09/09/1439 H. 

SAMA wishes to emphasize adherence to the provisions of the principles, including the following:

First: Emphasis on compliance with Article (14/c) of the principles, where Government subsidies, such as those provided through the Citizen Account Program, should not be counted as part of the total monthly income of the consumer, except for government subsidies that are documented and provided by the Ministry of Municipal and Rural Affairs and Housing or the Real Estate Development Fund, which are provided as periodic amounts. Non-financial support or amounts that are not disbursed periodically should not be included in the total monthly income of the consumer.

Second: Emphasizing that the deductible ratio mentioned in Article (15/C) for consumer benefiting from the Ministry of Municipal and Rural Affairs and Housing or the Real Estate Development Fund should be calculated from the total monthly income of the consumer if there are subsidy amounts disbursed to the consumer on a monthly basis.

For your information and action accordingly.

Referring to the letter of His Excellency the Minister of Housing, Chairman of the Board of Directors of the Real Estate Development Fund No. 3415/3570 dated 25/01/1435 H, which includes a reference to the Fund deducting the installments due from retired or non-employee borrowers from their bank accounts after the borrower signs a form stating his approval of the deduction, and then the borrower reviews the bank to approve the deduction according to the specified date for the start of the deduction, but they often receive complaints from some borrowers stating that the bank has not deducted them at all or that the deduction is made before the specified date, which leads to a defect in collecting the installments due from the Fund’s borrowers and increases the burden of review on borrowers between the Fund and the banks

 With reference to paragraph (3/15) of the banking consumer protection principles, we hope to take this into account and fully adhere to the deduction of installments (whether installments of Real Estate Development Fund loans or others) on the agreed date without submitting or delaying the deduction process, and to ensure that the installments of the Fund's borrowers are processed in accordance with the Fund's letters in this regard, with a report of implementation within a week from its date.

Referring to SAMA Circulars No. 18589/MAT/7431 dated 11/04/1432H and No. 44698/MAT/20914 dated 06/09/1432 H referring to the Royal Decree No. A/18 dated 20/03/1432 H exempting all borrowers from the Real Estate Development Fund for Private Residential Purposes from two installments for a period of two years, and SAMA directing banks to stop the monthly deduction from their customers' accounts in favor of the Real Estate Development Fund, starting from the salary of the month of Jumada Al-Awwal for the year 1432 H for a period of 24 months, so that the deduction resumes starting from the salary of Jumada I for the year 1434 H. Whereas, SAMA received the letter of His Excellency the General Director of the Real Estate Development Fund No. 5296/34701 dated 20/02/1434 H containing a request to resume the monthly discount on borrowers from the Real Estate Development Fund for private residential purposes, starting from the salary of the month of Jumada Al-Awwal for the year 1434 H. 

Therefore, we hope to resume the monthly discount on borrowers from the Real Estate Development Fund for private residential purposes, starting from the salary of the month of Jumada Al-Awwal for the year 1434 H.

         SAMA received the letter of His Excellency the Minister of Housing No. 7917/33701 dated 9/3/1433 H, which includes that the Real Estate Development Fund requests to repay the loan in monthly installments, and due to the difference in the value of the loan from one borrower to another and therefore the amount of the installment deducted on the borrower, it may result in differences in the amount of the monthly installment and the amount of the installment is not equal in all the monthly installments paid during the three hundred installments, and in most cases it is necessary to settle the differences in one of the paid monthly installments. The Ministry of Housing wishes to inform banks that the amount of the last monthly installment is different from the rest of the installments.  

        Therefore, we inform you that SAMA has no objection to the deduction of the last installment of the Real Estate Development Fund loan being different from the previous monthly installments, in order to settle the differences arising from the loan in an easy way for borrowers.