Saudi Central Bank bans unapproved deductions from customer accounts
Deducting installments before the agreed-upon date is also prohibited.
Cairo: Financing institutions in Saudi Arabia are prohibited from deducting any money from the individual customers' accounts without a court ruling or judicial decision, or without prior approval from the client, according to the kingdom's central bank.
Saudi newspaper Okaz, citing updated draft regulations drawn up by the central bank, reported that such deductions are also prohibited if the financing contract does not include any stipulation permitting withholding money.
Nor can more than one instalment for each financing contract from the salary be deducted unless there is a ruling or judicial decision, or prior clear approval from the client via one of the trusted, documented communication media.
Deducting instalments before the agreed-upon date is also prohibited.
Deduction dates
The financing institutions are obligated to set the deduction date in accordance with the salary deposit date for salaried clients, or with the date agreed upon between the customer and the financing institution for non-salary clients. This will take into account cases of change in the salary deposit date, such as when the salary deposit coincides with the weekends or the Eid (feast) holidays.
In addition, the central bank's draft prohibits overdue fines or collection fees more than the due amount of money, with a maximum value of one instalment for the whole financing duration.
Updating rules for settling customers' debts aims to protect rights of individuals and financing institutions alike, and maintain stability of financial transactions, lawyers said.
The move, according to lawyer Abdullah Mohammed, is also designed to boost protection of clients' privacy and their personal data.