In Saudi Arabia, the handling of end-of-service benefits, especially in relation to outstanding loans, is governed by specific regulations. The Saudi Arabian Monetary Authority (SAMA) has clarified that banks do not have the authority to withhold or deduct end-of-service benefits from their Saudi clients unless there is a judicial statement allowing them to do so.
 
Talat Hafiz, the Secretary-General of the Information and Banking Awareness Committee and spokesman for Saudi banks, has stated that banks have no authority to deduct any charges from the accounts of their clients except the monthly installment of the loan. 

In the event of a job termination, which might change the financial circumstances of the borrower, banks are required to reschedule the debt without adding extra fees or interest. This approach is taken to ensure that the borrower is not unduly burdened in times of financial hardship due to loss of employment.

It's important to note that these regulations apply equally to Saudi nationals and foreigners working in the country. The Saudi labor law, which underwent changes in 2023, provides clear guidelines on the eligibility, calculation method, and payment terms for end-of-service benefits.

In summary, in Saudi Arabia, unless there is a specific judicial verdict allowing a bank to withhold or deduct end-of-service benefits for loan recovery, the bank cannot do so. The borrower's rights are protected under Saudi law, ensuring that their end-of-service benefits are not automatically used to offset outstanding loans without proper legal authorization.