Appropriate Notice: A printed notice to the beneficiary clearly specifying the relevant facts such that it can reasonably be expected that the beneficiary has reviewed and understood its content. The notice may be delivered through (secured communication means) that reasonably confirm receipt of the notice.
Advertisement: A commercial message in any promotional medium, directly or indirectly, for a financing product.
Financing Amount: The maximum or total amounts available to the beneficiary under the financing contract.
Annual Percentage Rate (APR)(APR): The discount rate at which the present value of all installments and other payments due from the beneficiary, representing the total amount repayable by the beneficiary, equals the present value of the payments of the financing amount available to the beneficiary, as of the date the financing amount or its first installment is made available to the beneficiary. For more details, refer toAnnex No. (1).
Documented Communication: Instructions directed to the beneficiary and received through a recorded means that can be proven and retrieved, whether paper-based, electronic, or recorded call.
Beneficiary: Any natural person who obtains financing under the financing transactions covered by these regulations, for purposes outside the scope of his trade or profession.
Business Day: Any day on which banks provide services to the public.
Day: All days in the month including weekends and holidays.
Change of Circumstances: An event leading to a change in the beneficiary’s circumstances, either compulsorily or optionally, as follows:
- Compulsory circumstances: including but not limited to: mandatory retirement, death of the beneficiary, partial or total disability, loss of job, or bankruptcy
- Optional circumstances: including but not limited to: voluntary (early) retirement
Consumer Financing: Financing provided to the beneficiary on the following basis:
1. Financing purposes not related to the beneficiary’s commercial or professional activities. Generally includes personal financing, auto financing, home renovation, or any similar products adopted by the Saudi Central Bank.
2. Financing granted for the purchase of goods and services for consumption or any other beneficiary requirements as stated above, for example: purchasing furniture, durable consumer goods, cars, household items, education financing, and others.
3. Excludes real estate financing and lease financing.
4. Also excludes financing granted for the purpose of stock trading (Margin Lending).
Financing Entity: Any licensed and authorized bank or financial institution by the Saudi Central Bank.
Default on Payment: Any breach of the provisions and conditions of the financing contract and failure of the beneficiary to pay monthly installments for a period of (90) days from the due date.
Default Notice: Notice from the financing entity to the beneficiary within a financing contract indicating delay in payment.
Withdrawal: The financing amount withdrawn by the beneficiary under a financing contract.
Financing: The right to obtain a debt and defer its repayment, or the right to postpone the repayment of an existing debt.
Financing Contract: A contract under which the financing entity grants or promises to grant the beneficiary financing or a similar financial facility.
Total Salary: The monthly basic salary (after deducting retirement and insurance dues) plus all fixed allowances granted to the employee by his employer on a monthly basis.
Guarantee Agreement: A subsidiary agreement entered into by a guarantor who guarantees or promises to fulfill or repay any form of financing granted to a beneficiary.
Secured Communication Means: Registered mail, hand delivery, any recorded electronic means that can be proven and retrieved.
Guarantor: Any natural person who guarantees or promises to fulfill repayment of financing granted to a beneficiary.
Initial Disclosure: The information required to be provided to the beneficiary by the financing entity when opening a consumer financing account under Section Five of these regulations.
Licensed Credit Information Company: A credit information company licensed by the authority to collect credit information about consumers and provide it to members upon request.
Optional Feature: Features and services that are not part of the standard features or services of the financing contract product. This optional feature or service requires additional fees and/or adds a cost of term to the beneficiary.
Outsourcing to a Third Party: An arrangement whereby a third party (service provider, for example) undertakes to provide a service that was previously performed by the financing entity itself or a new service intended to be provided. Outsourcing may be to a service provider inside the Kingdom of Saudi Arabia or abroad, and the service provider may be a unit of the financing entity itself (such as a head office or foreign branch) or a subsidiary of the financing entity’s group or an independent third party, with commitment tothe outsourcing instructions issued by the authority pursuant to Circular No. 424/BCS/34720 dated 17/7/1429H corresponding to 20/7/2008G.
Refinancing: Repayment of an existing financing from a new financing amount granted to a beneficiary.
Repayment or Deduction: Deduction from the beneficiary’s total salary or monthly pensions. Excludes deductions for repayment of real estate financing and divorce alimony.
Saudi Central Bank: The Saudi Central Bank.
Amicable Settlement: Settlement of the dispute according to the procedures and timeframes for dispute resolution.
Secured Financing: Financing secured by assignment of ownership rights including usufruct guarantee in personal or real property taken by the financing entity as collateral. Financing may be secured by cash (deposits), tangible goods, or any other collateral.
Cost of Term: The value of the cost of term charged to the beneficiary under the financing contract, which must be expressed as a fixed annual percentage of the financing amount granted to the beneficiary.
Maturity Period: The period between the deposit of the financing amount and the date on which the final installment for repayment of the relevant financing is due.
Total Cost of Financing: All costs that the beneficiary is obligated to pay in addition to the principal financing amount under the provisions of the financing contract, including cost of term, fees, commissions, administrative service costs, insurance, and any expenses necessary to obtain the financing, excluding any expenses that the beneficiary can avoid such as costs or fees due to the beneficiary’s breach of any of his obligations under the financing contract.
Total Amount Payable by the Beneficiary: The financing amount plus the total cost of financing.