SAUDI EXPATRIATES

The central bank also ordered institutions to stop requesting any promissory notes or other commercial papers from individual customers when offering new credit card financing.

According to a recent circular issued by SAMA, financial institutions must cancel all existing promissory notes related to credit cards by 2/1/1448 AH. Trending: Cold wave to hit Saudi Arabia, temperatures to drop below zero

The circular also requires banks and finance companies to completely stop using promissory notes for all new credit card applications. This decision comes after SAMA monitored a growing use of promissory notes in the market for credit card financing.

In addition, SAMA instructed all financial institutions to update their internal policies, procedures, and control systems to fully comply with the new regulations.

Banks and finance companies must submit a corrective action plan within 30 days to SAMA’s Customer Protection Supervision Department. This plan must explain how the institution will handle existing cases involving promissory notes.

At a minimum, the corrective plan must include clear steps to return or cancel promissory notes or any other commercial papers that were previously collected from individual customers.

SAMA also stated that all corrective actions must be fully implemented within six months from the date of the circular, which was issued on 2 Rajab. Most Viewed: REGA gives 10-days grace period for correcting illegal rent increases in Saudi Arabia

The Saudi Central Bank explained that it recently noticed an increase in the practice of requiring promissory notes from individual customers as part of credit card financing. This rise led to regulatory intervention aimed at stopping the practice and strengthening customer protection in the Kingdom.