SAMA Bans Promissory Notes for Credit score Playing cards, Units Deadline for Banks

SAMA Bans Promissory Notes for Credit score Playing cards, Units Deadline for Banks

The Saudi Central Financial institution (SAMA) has directed all banks, native lenders, and finance firms working in Saudi Arabia to cancel all beforehand issued promissory notes linked to bank card merchandise.

The central financial institution additionally ordered establishments to cease requesting any promissory notes or different business papers from particular person prospects when providing new bank card financing.

The round additionally requires banks and finance firms to utterly cease utilizing promissory notes for all new bank card purposes. This choice comes after SAMA monitored a rising use of promissory notes out there for bank card financing.

As well as, SAMA instructed all monetary establishments to replace their inside insurance policies, procedures, and management programs to completely adjust to the brand new laws.

Banks and finance firms should submit a corrective motion plan inside 30 days to SAMA’s Buyer Safety Supervision Division. This plan should clarify how the establishment will deal with current circumstances involving promissory notes.

At a minimal, the corrective plan should embody clear steps to return or cancel promissory notes or some other business papers that had been beforehand collected from particular person prospects.

The Saudi Central Financial institution defined that it lately observed a rise within the observe of requiring promissory notes from particular person prospects as a part of bank card financing. This rise led to regulatory intervention geared toward stopping the observe and strengthening buyer safety within the Kingdom.

SAMA Bans Promissory Notes for Credit score Playing cards, Units Deadline for Banks