| 1. | The following terms and phrases, wherever mentioned herein, shall have the meaning assigned thereto unless the context requires otherwise:
|
| | SAMA: Saudi Arabian Monetary Authority.
|
| | Governor: Governor of Saudi Arabian Monetary Authority (SAMA).
|
| | Creditor: Banks and finance companies, supervised by SAMA and licensed to practice one or more activities of finance.
|
| | Principles: Responsible Lending Principles for Individual Customers.
|
| | Consumer: An individual who obtains or applies for a finance loan or at whom such finance is directed.
|
| | Finance Amount: The limit or the total amount made available to the consumer under a finance contract.
|
| | Term Cost: The term cost due by the consumer under a finance contract, which may be expressed as a fixed or changed annual percentage of the Finance Amount provided for the consumer.
|
| | Variable Term Cost: The term cost specified according to an index or a reference rate which must be explicitly stated in the finance contract; such a cost will change in accordance with the change in such an index.
|
| | Total Amount Payable by the Consumer: Finance amount plus all due costs that the consumer must pay as per provisions of finance contract, including term cost, fees, commissions, administrative costs, insurance and any expenses deemed necessary to obtain finance and excluding any expenses that the consumer can avoid, such as costs and fees customer must pay upon his/her violation of any obligations mentioned in the finance contract.
|
| | Monthly Credit Obligations: Total amount payable by the consumer, which is calculated on a monthly basis, as per the credit report issued by licensed credit bureaus and the consumer’s disclosure.
|
| | Gross Salary: The basic monthly salary (after deducting pension or GOSI contributions) plus all fixed allowances paid to the consumer by the employer on a monthly basis.
|
| | Total Monthly Income: The monthly average income of the consumer from any periodical income whether received on a monthly, annual or other periodic basis, including gross salary or any other income (allowances and compensation that are paid periodically, rental income, revenues of other investments, etc.) which can be reasonably verified, calculated as per provisions of Paragraph (17) hereof.
|
| | Monthly Disposable Income: The remaining amount of the consumer’s total monthly income for spending, investment or savings after deducting current or expected basic expenses and monthly credit obligations, calculated on a monthly basis.
|
| | Deductible Ratio: The ratio of consumer’s monthly credit obligations to total monthly income, calculated as per terms and conditions stated in Chapter IV on Quantitative Principles of Responsible Lending.
|
| | Deduction: The act of deducting an amount from the consumer’s gross salary or monthly pension.
|
