The Central Bank would like to emphasize the importance of the principles and rules for protecting financial institution clients, particularly the necessity of fair and equitable treatment (Principle No. 1), disclosure and transparency (Principle No. 2), and financial education and awareness (Principle No. 3). Additionally, the bank highlights the responsibilities of lenders toward their clients, particularly the obligation to ensure that the product is suitable for the client's needs and circumstances, explaining the product’s nature, costs, and associated benefits and risks in a clear and understandable manner. Moreover, lenders must provide advice and support to clients facing financial difficulties, working with them to overcome these challenges before proceeding with legal actions.

In light of the challenges some beneficiaries of variable-cost real estate financing products have faced, particularly the increase in monthly installments, and based on a study conducted in this regard, the Central Bank directs mortgage lenders to immediately take all necessary actions to care for their clients. These care measures should include appointing specialists with sufficient knowledge of this type of product to communicate with clients, providing a clear explanation of the product’s nature, its benefits and risks, the relevant contract terms, the repricing mechanism, and addressing any other client inquiries.

The care procedures must also include offering clients one or more options, in addition to the option of continuing with the existing mortgage contract. These options may include converting the contract to a fixed-rate financing contract, rescheduling the payments, or enabling the client to transfer the debt to another mortgage lender under conditions that suit the client.

The Central Bank stresses that none of these options should result in the client being charged any additional costs for the remaining period, in accordance with the early repayment provisions outlined in the finance regulations and without imposing any additional administrative fees on the client.

The Central Bank clarifies that these directives are issued to ensure the protection of clients' rights and to promote fairness and transparency in transactions. This is based on the powers granted to the Central Bank under the Saudi Arabian Monetary Authority Law, issued by Royal Decree No. (23) dated 1377/05/23 AH, the Real Estate Finance Law issued by Royal Decree No. (M/50) dated 1433/08/13 AH, the Finance Lease Law issued by Royal Decree No. (M/48) dated 1433/08/13 AH, and the Finance Companies Control Law issued by Royal Decree No. (M/51) dated 1433/08/13 AH, along with the implementing regulations for these laws. The Central Bank will take legal action in the event of non-compliance with the above directives.

Additional instructions pursuant to Circular No. (391000018728) dated 1439/2/17 AH.

In light of the inquiries received by the Central Bank on this matter, the Central Bank emphasizes that mortgage lenders must undertake the following:

1. Disclose the reference index for the variable cost of real estate financing products on their website.
2. Urgently communicate with all customers benefiting from variable-cost real estate financing products regarding the following points:

The Central Bank will take all necessary legal actions in the event of non-compliance with the issued instructions.