The Saudi Central Bank has issued a draft update of debt collection regulations for individual customers to protect accounts and ensure fair banking. Under this new proposal, banks and financial companies cannot take money from a customer’s account without clear permission or a court order.
No Deductions Without Permission
The draft regulations state that banks can’t take money from a customer’s account unless the customer agrees or if there’s a court order. If the loan agreement doesn’t specifically allow deductions, banks aren’t allowed to take any money. Finance companies also need special agreements to deduct money without salary guarantees.
No Freezing Accounts Without a Court Order
According to the draft, banks cannot freeze or hold money in a customer’s account, even temporarily, without a court order or clear customer approval. They also can’t take multiple payments in one month unless the customer agrees, nor can they reserve funds before the due date.
Deductions to Match Your Payday
The draft requires banks to align deduction dates with the customer’s payday. If payday changes, like for a holiday, banks must adjust the deduction date. If they miss the agreed payment date, they have to extend the loan period without charging extra fees.
Limited Fees and Penalties
The draft regulations limit fees and penalties, stopping banks from charging more than the actual payment amount. The maximum allowed extra fee is equal to one monthly payment for the entire loan term.
Helping Customers with Payment Problems
The draft encourages banks to help customers struggling with payments. Banks should offer options like debt restructuring, where they adjust the payment plan without adding extra fees. They are expected to respond within 10 days if the customer’s financial situation changes and they need help.
Protecting Privacy
The draft rules also focus on privacy, requiring banks to keep customer information safe and secure.
In cases of total disability or death, banks must cancel any remaining debt to ease the financial burden on the customer’s family. This draft aims to ensure that banks treat customers fairly and support them during difficult times.