SAMA said to monitor rescheduling of consumer loans

The Saudi Arabian Monetary Agency (SAMA), the kingdom's central bank, is monitoring the rescheduling of consumer loans for clients hit by the kingdom’s decision to cut bonuses and salaries of public sector employees, Al-Eqtisadiah newspaper reported on Thursday, citing an unnamed banking source.

Clients who are hurt by rescheduling measures are urged by SAMA to file complaints, but no violations have been so far observed in local banks, the source said.

The source added that SAMA will impose penalties on banks violating its directions on rescheduling loans at no administrative fees or at new interest rates.

In early October, the Saudi central bank ordered local banks to reschedule consumer loans for employees whose salaries decreased after the cancellation of several allowances and bonuses, Argaam earlier reported.

Monthly installments on consumer loans must not exceed 33.33 percent of a borrower's total salary. Banks also do not have to abide by the 20 percent down payment on loans previously mandated when rescheduling client loans.