The Saudi Central Bank has issued updated regulations prohibiting financing institutions from deducting funds from individual customer accounts without a court ruling, judicial decision, or prior consent from the client.

Strict Deduction Guidelines

According to Saudi newspaper Okaz, these new draft regulations specify that any deduction without clear stipulations in the financing contract, a court order, or documented client consent is unlawful. Additionally, institutions are restricted from deducting more than one installment per financing contract without prior approval.

Prohibition on Early and Excessive Deductions

Early deductions are not allowed, and the financing institutions cannot deduct installments before the agreed-upon date. Moreover, the regulations limit overdue fines and collection fees, capping them at the amount of a single installment for the entire financing duration.

Setting Deduction Dates

The Saudi Central Bank requires financing institutions to align deduction dates with the salary deposit dates for salaried customers or set a mutually agreed date with non-salaried clients. This helps accommodate changes, such as adjustments for weekends or Eid holidays.

A Move Towards Customer Privacy and Stability

Legal experts, like lawyer Abdullah Mohammed, emphasize that these rules not only protect individual rights but also enhance financial stability and ensure customer privacy. The updated regulations demonstrate a commitment to securing client personal data and preventing unauthorized financial transactions.