SAMA tells banks to reschedule loans of clients hit by austerity measures

The Saudi Arabian Monetary Agency (SAMA) has asked local banks to reschedule consumer loans at no cost or penalties for clients affected by last week’s decision to cut bonuses and freeze salaries of public sector workers.

The cabinet said last week that it would reduce the salaries of ministers by 20 percent and slash a range of allowances for public employees and Shura council members to help curb a budget deficit caused by low oil prices.

“The Saudi Arabian Monetary Agency (SAMA) has obliged local banks to reschedule consumer loans for employees whose salaries went down after the cancellation of a number of allowances and bonuses,” SAMA, the central bank, said in a statement.

Under the central bank’s regulations, monthly installments on consumer loans must not exceed 33.33 percent of a borrower's total salary. Banks also don’t have to abide by the 20 percent down payment on loans previously mandated when rescheduling the loans of clients.  

Outstanding consumer loans in the kingdom reached 343 billion riyals ($91.5 billion) at the end of June, official data showed.