The Saudi Arabian Monetary Authority (SAMA) has issued the rules of offering consumer financing for goods and services through registered lenders, the Kingdom’s central bank said in a statement.
Under the updated rules, a merchant offering consumer financing should be licensed and the owner of these goods.
Financing agencies are able to assign part of their services to the merchant or any other agency, the statement said, adding that mortgages are excluded from these rules.
Any unlicensed agency or individual will be considered violators and will be penalized by either jail time of up to two years or a SAR 0.5 million penalty, or both, as per the regulations.
Meanwhile, SAMA decided to ease some of the regulatory requirements for obtaining a financing license, in order to encourage new agencies to serve consumers and offer regulated and fair transactions, while preserving clients’ rights.
SAMA has issued the updated regulations of consumer financing on its website, and has called on the public to share their views on them within 30 days.
The detailed rules can be found here.
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