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Banking ConsumerProtection Principles

SAUDI ARABIAN MONETARY AGENCYCONSUMER PROTECTION DEPARTMENTJUNE 2013

Consumer Protection Department

Alawwal bank logo is a registered trademark of The Saudi British Bank. Any references to Alawwal bank as a contracting party in this document shall be construed as a reference to The Saudi British Bank C.R. 1010025779 as the contracting party, following the merger of Alawwal bank and The Saudi British Bank in accordance with Articles 192 of the Companies Law.

Banking Consumer Protection Principles

PART 1: INTRODUCTION PAGE 1 Financial Consumer Protection in The Kingdom of Saudi Arabia 32 Financial Consumer Protection Implementation Model 43 Definitions 5

PART 2: BANKING CONSUMER PROTECTION PRINCIPLES

4 Introduction 75 GeneralPrinciples 86 Consumer Responsibilities 10

PART 3: MAIN COMMITMENTS

7 Terms and Conditions 128 Fees,ChargesandPricing 139 DataProtectionandConfidentiality 1410 AdvertisingandMarketingCommunications 1511 Account Opening and Closing 1712 AccountTransferring 1813 Banking Cards 1914 Internet and ATM Banking Services 2115 ConsumerFinance 2216 Letterof‘NoLiability’ 2217 Employees 2318 ForeignExchangeServices 2419 General 25

PART 4: ERRORS AND COMPLAINTS 20 Errors 2621 Complaints 26

PART 5: RELEVANT INSTRUCTIONS ISSUED FROM SAMA

22 Circulars 28

Contents


PART 1: INTRODUCTION

1. Financial Consumer Protection in The Kingdom of Saudi Arabia

TheSaudiArabianMonetaryAgency(SAMA)istheregulatorandsupervisoroflicensedfinancialinstitutionsincludingbanks,financecompanies,leasingandrealestatecompanies,insurancecompanies,moneyexchangercompaniesandcredit information companies in the Kingdom of Saudi Arabia.

SAMAhasbeenastrongadvocateoftheprotectionofconsumerinterestssinceobtainingitscharterin1952andtheissuanceoftheBankingControlLawin1966.Consequently,overthisperiod,SAMAhasplayedanimportantroleensuringthatconsumersaredealtwithfairlyandhonestlybythefinancialinstitutionsunderitssupervision.

In2005,SAMAwasdesignatedastheregulatorfortheinsurancesectorundertheCooperativeInsuranceLawthusfurtherextendingSAMA>sroleinthelicensingandsupervisionoffinancialinstitutions.Morerecently,SAMAhaspublishedthe‘ImplementingRegulationsoftheFinancialLeaseLaw’andthe‘ImplementingRegulationsoftheLawonSupervisionofFinanceCompanies’.

Theglobalfinancialsituationhasbroughtalotofattentiononhowthefinancialservicesindustrydevelopsnewprod-uctsandservices,howthesearethensoldtoconsumersandhowconsumersareofferedconsultationandredresswhentheyhaveanissueorcomplaint.Internationalbodiesincluding‘G20’,‘FinancialStabilityBoard(FSB)’andthe‘OrganisationforEconomicCo-operationandDevelopment(OECD)’arediscussingneworrevisedstandardsandprinciples in the area of consumer protection.

AstheSaudiArabianfinancialsectorevolvesandgrows,SAMAwillcontinuetoreviewthesedevelopmentsanddecideonappropriatelegislative,regulatoryandorganisationalchangestoprovidethelevelofconsumerprotectionexpectedfromacountrythatisamemberoftheworld’smaineconomicandfinancialorganisations.SAMAisnowsettinganobjectivethatthoseconsumerswhohavedealingswithlicensedfinancialinstitutionsintheKingdomofSaudiArabiawillreceivetheexpectedleveloffairtreatment,honestyandeaseofaccesstofinancialproductsandservices.


2. Financial Consumer Protection Implementation Model

Figure 1

CONSUMER PROTECTION“Takealeadingroleinpromotingtransparency,

fairnessandeaseofaccessforfinancialconsumers,including the resolution of complaints”

A combined approach of‘Principles’and‘Rules’

PRINCIPLES

Provideguidance topolicymakers

to makedecisions

BUSINESS CONDUCT

“Issuingpolicyprinciplesthatfinancialinstitutionswillbe

encouraged toachieve”

REGULATIONS

“Issuingdirectivesbywayofregulations that

financialinstitutionsmustfullyimplemetandcomplywith”

RULES

Providedirection topolicymakers

to makedecisions

Figure 1isthefinancialconsumerprotectionmodelthatdescribeshowSAMAistakingaleadingroleinpromotingtransparency,fairnessandeaseofaccesstofinancialproductsandservicesforconsumers,especiallyintheresolutionof consumer complaints.

SAMAsetsouttheconductexpectedfromfinancialinstitutionsthroughvariousregulations,policiesandissuedinstructionsandbymakingsureofthecommitmentoftheinstitutionstoapplytheserequirements.


3. Definitions

Establishment SaudiArabianMonetaryAgency.

Advertising:Commercialmessaginginanymediumthatdirectlyorindirectlypromotesfinancialproductsorfinancialservices.

Advice:Apersonalrecommendationfromaqualifiedindividualgivenafterdueconsiderationofaconsumer’spersonal circumstances and objectives.

Awareness:Understandingoftheprinciplesofconsumerprotectionandbasicfinancialterminologyusedinorganisationsandtheabilitytodifferentiatebetweenvariousproductsandservices.

Best interests: Something which does not harm consumers.

Complaint resolution: Achieving an outcome to a consumer complaint.

Conflict of interest:Whenthedutyofthebanktoactinthebestinterestsofanyconsumerinrelationtoamatterconflicts,orthereisasignificantriskthatitmayconflict,withtheowninterestsofthebank,inrelationtothatorarelated matter.

Consumer: Anaturalpersonwhoisactingoutsideofthescopeofhisbusinessandwhoisenjoyingtheproductsandservicesofferedbyabank.

Cooling off period: Theperiodoftime(10businessdays),duringwhichaconsumercancanceltheircontractwithoutpenalty.Culture Thesetofbeliefs,values,andnormsthatrepresentstheuniquecharacterofanorganisationandprovidesthecontextforactioninitandbyit.

Disclosure: Transparentlyprovidingallrelatedinformationtoconsumers.

Employee: Apersonwhoishiredtoprovideservicestoacompanyonaregularbasisinexchangeforfinancialreturn.Includespersonnelhiredandundercontract,includinginsourcedand/oroutsourcedarrangements.

Error: Anoutcomecontrarytothedocumentedpolicyoroperationalandcontrolprocedures,whichhasafinancialeffectonand/orwhichbreachesthestatutoryandregulatoryrightsofoneormoreconsumers.

Free of charge: Withoutdeductionorpaymentofanydirectorindirectfees,commissionsorcharges.

G20: Agroupoffinanceministersandcentralbankgovernorsfrom19oftheworld>slargesteconomies,andtheEuropean Union.

IBAN:InternationalBankAccountNumber-astandardnumberingsystemdevelopedtoidentifybankaccountsfromaround the world.

Incentives:Financiallyrewardingemployeesforsaleoffinancialproductsorservices.

InclusionFinancialinclusioninvolvestheavailability,usageandqualityoffinancialservicesandproductstoallcitizensinthe Kingdom of Saudi Arabia.

Intermediary:Anentitythatactsasthemiddlemanbetweentwopartiesinafinancialtransaction.

Licensed institutions:InstitutionsthatarelicensedbySAMAandconducttheirbusinessintheKingdomofSaudiArabia.

Mandatory information:InformationrequiredfromconsumersbyinstructionsfromSAMAandbybankpolicy.

Prospect consumer: A natural person who is acting outside of the scope of his business and who is enquiring about availingoftheproductsandservicesofferedbyabankforthefirsttime.

Third party: An authorised agent acting on behalf of the bank


PART 2: BANKING CONSUMER PROTECTION PRINCIPLES

4. Introduction

4.1 The‘BankingConsumerProtectionPrinciples’istheguidingdocumentthatwillenablethelicensedbankinginstitutions(banks)todelivertherequiredleveloffairtreatment,honestyandfinancialinclusivenessandmeetSAMA’sstrategicobjectiveforfinancialconsumerprotectionintheKingdomofSaudiArabia.The‘BankingConsumerProtectionPrinciples’appliestotheactivitiesofbanksoperatingbywayofalicenseandunderthesupervisionofSAMA,andwhoaredealingwithpersonswhoare,ormaybecomeconsumers.Italsoappliestotheactivitiesofanythirdpartyengagedbythebanksforoutsourcedactivity.

4.2 Theseprinciplesarebindingforbanksandcomplementarytotheinstructionsandregulationsissuedbytheinstitution.Itshouldapplytoalltransactionsthataremadewithindividualconsumersafter01/09/2013.

4.3 ABankshouldprovideafreecopyoftheseprinciplesthroughallofitsbranchestoconsumersatthebeginningoftheirrelationshiporwhenexistingconsumersareaccessinganewproductorservice.Acopyshouldalsobeavailableatalltimesonthebank’swebsite.

4.4 Uponbeingrequiredtodoso,abankshouldprovideallrecords,documentsandinformationrelatingtothe‘BankingConsumerProtectionPrinciples’requestedbySAMA.

4.5 The‘BankingConsumerProtectionPrinciples’areissuedpursuanttopowersgrantedtoSAMAunderthefollowing legislation and regulation:

(a)CharteroftheSaudiArabianMonetaryAgency–Article(3d),issuedbyRoyalDecreeNo.23.Dated23/05/1377H(15/12/1957G).

(b)BankingControlLawissuedbyRoyalDecreeNo.M/5.Dated22/02/1386H(12/6/1966G).

(c)MinisterialDecreeNo.3/2149.Dated14/10/1406H(22/6/1986G).


5. General Principles

5.1The‘G20High-LevelPrinciplesonFinancialConsumerProtection’weredevelopedin2011byaspecialtaskforceoftheOECD.Thesehigh-levelprinciplesarenowusedworldwidebyfinancialregulatorstocomplementtheirexistingfinancialregulations,especiallythoseregulationsrelevanttotheprotectionofconsumers.

The‘G20High-LevelPrinciplesonFinancialConsumerProtection’providethebackgroundforthe‘GeneralPrinciplesforFinancialConsumerprotection’nowbeingadoptedaspartofthe‘BankingConsumerProtectionPrinciples’andwhichhelptocontextualisethekeycommitmentsinthefollowingsections.

General Principles for Financial Consumer Protection

PRINCIPLE 1: Equitable and fair treatmentBanksshoulddealfairlyandhonestlywithconsumersatallstagesoftheirrelationship,sothatitisanintegralpartofthe culture of a bank. Care should also be made and special attention given to the needs of vulnerable persons and groups.

PRINCIPLE 2: Disclosure and transparencyBanks should provide up to date information about products and services to consumers. This information should be easilyaccessible,clear,simpletounderstand,accurate,notmisleadingandincludeanypotentialrisksfortheconsumer.Itshouldincludetherightsandresponsibilitiesofeachparty,includingthemechanismforeitherpartytoendthebankingrelationship,aswellasdetailsoffees,pricingandanypotentialpenaltiesthattheconsumermayincur.

PRINCIPLE 3: Financial education and awarenessBanksshoulddevelopprogrammesandappropriatemechanismstohelpexistingandfutureconsumersdeveloptheknowledge,skillsandconfidencetoappropriatelyunderstandrisks,includingfinancialrisksandopportunities,makeinformedchoices,knowwheretogoforassistancewhentheyneedit.

PRINCIPLE 4: Behaviour and work ethicBanksshouldworkinaprofessionalmannerforthebenefitofclientsduringtheirrelationship,whereabankisprimarilyresponsiblefortheprotectionofthefinancialinterestsoftheclient.

PRINCIPLE 5: Protection against fraudBanksshouldprotectandmonitorconsumerdepositsandsavingsandothersimilarfinancialassetsthroughthedevelopmentofcontrolsystemswithahighlevelofefficiencyandeffectivenesstoreducefraud,embezzlementormisuse.

PRINCIPLE 6: Protection of privacyConsumers’financialandpersonalinformationshouldbeprotectedthroughappropriatecontrolandprotectionmechanisms.Thesemechanismsshoulddefinethepurposesforwhichthedatamaybecollected,processed,held,usedanddisclosed(especiallytothirdparties).

PRINCIPLE 7: Complaints handlingConsumersshouldhaveaccesstoadequatecomplaintshandlingmechanismsthatareaccessible,affordable,independent,fair,accountable,timelyandefficientandbasedonSAMArules.

PRINCIPLE 8: CompetitionConsumersshouldbeabletosearch,compareandwhereappropriate,switchbetweenproducts,servicesandproviderseasilyandclearlyatareasonablecost.

PRINCIPLE 9: Third partiesBanksandtheirauthorisedagentsshouldhaveasanobjective,toworkinthebestinterestoftheirconsumersandberesponsibleforupholdingfinancialconsumerprotection.Banksshouldalsoberesponsibleandaccountablefortheactions of their authorised agents.

PRINCIPLE 10: Conflict of interestBanksshouldhaveawrittenpolicyonconflictofinterest,andensurethatthispolicywillhelptodetectpotentialconflictsofinterest.Whenthepossibilityofaconflictofinterestarisesbetweenthebankandthethirdparty,thisshould be disclosed to the consumer.


6. Consumer Responsibilities

Theresponsibilitiesofconsumerswillbesupportedbyon-goingconsumereducationandawarenessprogrammesfromSAMAaswellasinitiativesbythevariousbanksfortheirownconsumers.

Consumer responsibilities include the following:

6.1 Be honest with the information you provide Alwaysgivefullandaccurateinformationwhenyouarefillinginanybankdocuments.Donotgivefalsedetailsorleave out important information.

6.2 Carefully read all information provided by your bankWhenyousubmityourapplication,youshouldreceivefulldetailsontheobligationsforyourserviceorproduct.Makesureyouhaveaccesstothedetailsofyourobligations,thatyouunderstandthemandthatyoucancomplywith them.

6.3 Ask questionsItisimportanttoaskquestionstobankemployeesaboutanythingthatisunclearoraconditionthatyouareunsureabout.Thestaffwillansweranyquestionsinaprofessionalmannertohelpyouinyourdecisionmaking.

6.4 Know how to make a complaintYoucanbeproactiveinusingthisserviceandknowinghowtoescalateyourissuetohigherlevels,ifappropriate.Yourbankwillprovideyouwithdetailsonhowtocomplainandthetimeframefortheirresponse.

6.5 Use the product or service in line with the terms and conditionsDonotusetheproductorservice,exceptinaccordancewiththetermsandconditionsassociatedwiththem,andaftermakingsureofyourcompleteunderstanding.

6.6 Avoiding riskDonotpurchaseaproductorservicewhereyoufeelthattherisksdonotsuityourfinancialsituation.Somefinancialproductsorservicescarryrisksandyourbankshouldclearlyexplainthesetoyou.

6.7 Apply for products and/or services that meet your needsWhenmakingarequestforaproductorservice,youshouldmakesurethatissuitsyourneeds.Youshoulddiscloseallfinancialobligationswithallpartiestoensurethedecisionisbasedonyourabilitytomeetyouradditional obligations after contracting for the product or service.

6.8 Report unauthorised transactions to your bankIfyouhavediscoveredunauthorisedtransactionsonyouraccount,youshouldreportthistoyourbankimmediately.

6.9 Do not disclose your banking informationUndernocircumstancesshouldyouprovideanybankaccountdetailsorothersensitivepersonalorfinancialinformationtoanyotherparty.

6.10 Talk to your bank if you are encountering financial difficultiesBytalkingtoyourbank,youcandiscusspossiblealternativerepaymentarrangementsthatwillenableyoutofullydischargeyourresponsibilities.

6.11 Updating informationYoushouldupdateyourpersonalinformation,includingcontactinformation,sothatitisupdatedcontinuouslyandalsowhensorequestedbythebank.Youareresponsibleforfailingtoprovideallrelevantinformationtothebank.

6.12 Your mail addressUseyourownmailaddress(regularmailande-mail)whengivingcontactdetailstoyourbank.Donotuseotherfriends’orrelatives’mailaddresseswhichcanexposeyourfinancialinformationtoothers.


6.13 Power of AttorneyBecarefulwhendealingwith‘PowerofAttorney’.Knowwhatinformationthatyouaregivingaccesstoandtowhomyouaregivingpoweroveryourfinancialmatters.

6.14 Do not sign uncompleted formsMakesurealloftherequiredfieldsandnumbersarecompletedinaformthatispresentedtoyouforsigningorinitialling.Donotsignemptyorpartiallycompletedforms.

6.15 Review all of your documentsReviewallofyourdocumentsbeforeyousignthemtoensurenoerrorsaremadeintheaccountnumberoramount. Your signature is an approval and agreement of the document content.

6.16 Keep copies of your documentsKeepalldocumentsinasafeplacethatareprovidedtoyoubythebank.Theyshouldprovideyouwithacopyofsigned contracts and other relevant documents and papers.


PART 3: KEY COMMITMENTS

Thispartdetailstherulesandprinciplesthatsupportthe‘BankingConsumerProtectionPrinciples’.

7. Terms and Conditions

7.1 Up to date terms and conditions for products and services should be provided to new consumers or at therequestofexistingconsumers,throughthechannelsavailablefromthebankandinaccordancewiththeconsumer’spreference,anddetailedeitherbywayofageneraltermsandconditionsbookletorbyindividualbrochures. Consumers should be encouraged to read these terms and conditions before committing to a product or service.

7.2 Abankshouldcommunicateanychangesintermsandconditionsatleast30businessdaysinadvanceofanysuchchanges being implemented.

7.3 Alltermsandconditionsshouldbewritteninclearandunderstandablelanguage,inamannerthatisnotmisleadingandprovidedtotheconsumerinArabic,withatranslationavailableinEnglishifrequested.

7.4 Abankshouldincludespecificwarningstatementsinalltermsandconditions,applicationformsandadvertisements,statingclearlythepotentialconsequencesfortheconsumerinnotmeetingtheproductorserviceconditions as agreed in the application form.


8. Fees, Charges and Pricing

8.1 Abankwillonlydeducttheapprovedfees,chargesandcommissionsthataredetailedintheSAMAscheduleoffeesandchargesandcommissions.Allnewfees,chargesandcommissionsshouldbeapprovedbySAMA.ThefullyapprovedSAMAscheduleoffeesandcharges,includingthirdpartyfees,chargesandcommissions,shouldbeclearlyondisplayinallbankbranchesandonthebankwebsite.

8.2 Abankshouldprovideconsumerswithacopyofthescheduleoffees,chargesandcommissionswhentheyprovideaproductorservice,whensigningacontractorasrequestedbyaconsumeratanytime.

8.3 Abankshouldinformtheaffectedconsumersofanychangesinfeesandcharges,includinganyfeesandchargesimposedbyathirdparty,30businessdaysinadvanceofanysuchchangesbeingimplemented.

8.4 Abankshouldclarifytoconsumersthemethodologyforcalculatingfeesandcommissionsandtheamountofprofitearnedbythebankfortheproductsandservicesheldbythoseconsumers.

8.5 Afullbreakdownofanyaccumulatedfeesandchargesdeductedfromthefinalclosingbalanceshouldbecommunicatedtotheconsumerwithinfivebusinessdaysofclosingtheconsumer’saccountortransferringtoanother bank.

8.6 Consumersshouldbeadvisedincontractsandapplicationformsthatanyfeesorcharges(greaterthanSR500),whicharerequiredfromtheconsumerinordertoavailofabankproductorservice,willbeevenlydistributedwithout amortisation over the projected lifetime of the product or service and will not be deducted in one full payment,unlesstheconsumerconfirmsbysignedagreementthattheywishtodoso.

8.7 Iftheconsumerdecidesnottoproceedwiththebankingproductorservicewithin10daysofsigningthecontract,abankshouldrefundanappropriateportionofanyfeeorchargewhichhasbeendeducted.

8.8 Abankcannotimposeatransactionorpaymentfeeorchargeonanytransfersorpaymentsbetweenaconsumer’saccountswithabank,includingcreditcardsissuedfromthatbank.

8.9 Abankisrequiredtoprovidewrittenjustificationtoconsumersforfees,chargesandcommissionsdeductedforthe products and services held.

8.10AbankshouldnotifytheirconsumersthatanyATMcardwithdrawalsoutsideofKSAcouldresultinadditionalwithdrawal fees as per SAMA schedule of fees and charges.


9. Data Protection and Confidentiality

9.1 Abankhasresponsibilitytoprotectconsumerdataandmaintaintheconfidentialityofthedata,includingwhenitisheldbyathirdparty.

9.2 Abankwillprovideasafeandconfidentialenvironmentinallofitsdeliverychannelstoensuretheconfidentialityandprivacyofconsumerdata.

9.3 Abankhasageneraldutyofconfidentialitytowardsaconsumerexcept:

•Whenthedisclosureisimposedbytherelevantauthority(suchastheMinistryofInterior,Courtsetc.).

•Whendisclosureismadewiththewrittenconsentoftheconsumer.

9.4Abankshouldhavesufficientprocedures,systemcontrolsandchecksandemployeeawarenesstoprotectconsumerinformationandtoidentifyandresolveanycausesofinformationsecuritybreaches,wheretheymayoccur in the future.

9.5Abankshouldensurethatthepersonalinformationofconsumerscanbeaccessedandusedbyauthorisedemployeesonly.Thisistoensurethataccesstoconsumer’sfinancialand/orpersonalinformationisforauthorisedemployeesonly,whetheronthejoboraftertheyhaveceasedworkingwiththebank.


10. Advertising and Marketing Communications

10.1Abankcanuseitsmainchannels(branches,website,automatedtellermachines,telephonebanking,accountstatements)aswellasusepublicmediachannels(audio,visualandprint,etc.)forthemarketingofproductsforfinancingandcreditcardsusingpromotionalmethodsandmarketingasitdeemsappropriateforthetargetsegment.ThesemethodsshouldbeinlinewiththeinstructionsandregulationsissuedbySAMA.

10.2Advertisingissuedbybankswillnotbedeceptiveormisleadingandwillnotexaggeratetheadvantagesofaproductorservice.Alltextandnumberswillbeclearlyvisibleandunderstandablewithalegiblefontsize,including footnotes.

10.3Whereabankadvertisesorpromotesanyproductorservicethatrequiresaconsumertopayafee,itshouldinclude the following disclosures:

•thenameandlogoofthebankandthebankcontactdetails.

•theadvertisementshouldstatethenameoftheproductandtheannualpercentagerateoftheproductshouldbe clear for the consumer. A bank cannot advertise a percentage rate for a term other than annual.

•indicatetheamountofallfeesandcommissionsrelatingtotheuseoftheserviceorproduct.

•bankscannotdothefollowing:

a)provideanofferorfalsedataorinformationortobeevasiveaboutthetermsthatwouldleaddirectlyorindirectlytodeceiveormisleadaconsumer.

b)useanadvertisementorposterwithouttherighttouseacounterfeitmarkorlogo.

SAMAwillcompelabankthatdoesnotcomplywiththeconditionssetforthinthisArticletowithdrawtheadvertisementwithinonebusinessdayofnotifyingthebanktodoso.

10.4Abankshouldensurethatanadvertisementorpromotionalmaterialisdesignedandpresentedsothatanyconsumercanreasonablybeexpectedtoknowthatitisanadvertisementandavailabilityoftheproductorservicemayrequiretheconsumertomeetcertaincriteria.

10.5Abankshouldensurethatanadvertisementorpromotionalmaterialthatoffersintroductorylowcostfees,chargesorpricing,clearlystatestheexpirydateofsuchanoffer.

10.6Abankshouldensurethatanadvertisementorpromotionalmaterialwhichcontainsanyacronyms(forexampleAPR)statesclearlywhatthelettersactuallystandfor.

10.7Abankshouldensurethatanadvertisementorpromotionalmaterialonlydescribesaproductorserviceas‘free’wheretheproductorserviceinitsentiretyisavailablefreeofchargetoallconsumers.

10.8 A bank should provide a designated area in each branch for consumers to review and complete opening of accountsandtodisplaybrochuresandformsforconsumers.

10.9 Consumershavetherighttoreceiveshortmessages(SMS)orpromotionalmaterialforservicesandproductsprovidedbyabank,andthebankshouldobtainthepriorapprovaloftheconsumer,whetherinwritingorelectronically,accordingtothepreferencesoftheconsumer.

10.10Abankshouldneversendpromotionalmaterialtoconsumersundertheageof18yearsthatpromoteproductsorservicesthatcarryanunsuitableriskforsuchagegroup.


11. Account Opening and Closing

11.1Abankshouldacceptandfulfilallrequeststoopennewaccounts,wheretheconsumerhascompletedalloftherequireddocumentsandmeetstheconditionsrequiredtocompletetheaccountopeningprocess,withtheexceptionofthecasesprovidedforintherulesofopeningandoperatingaccountsissuedbySAMA.

11.2Abankshouldnotunreasonablydelaytheopeningofabankaccountforaconsumerbyengagingindelayingtactics.

11.3Abankshouldinformconsumersofdecisionbythebanktocloseaconsumer’saccount60daysinadvanceoftheaccountbeingclosedandthereasonsforthis.Incasesoffraudorembezzlementbyaconsumer,abankcanimmediatelycloseorblockanaccountwithoutcommunicatingwiththeconsumer.

11.4Abankshouldnotrequireaconsumertohaveaminimumdeposittoopenapersonalbankaccount.However,abankhastherighttocloseanaccountiftheaccountbalanceiszeroforaperiodof90daysfromthedatethatthe account is opened.

11.5 A bank should inform a consumer of the consequences of opening and operating a bank account. This should includeaformalprocessofensuringthatconsumersarefullyawareoftheconsequencesofgrantingaccesstotheir bank accounts to third parties.


12. Account Transferring (implementation date 1st January 2014)

12.1Abankshouldhaveanaccounttransferpackavailableineachbranchandonitswebsite,containingthefollowinginformation:

•adescriptionoftheaccounttransferprocess,includingtheprocedurestobefollowedbytheconsumertotransfer their account to another bank.

•theprocesstoopentheaccount,includingalistoftherequirementswhichtheconsumershouldfulfilinorderto open the account.

•an‘AccountTransfer’formwhichincludesthefollowing:

- the date to transfer the account.

-consenttoclosetheaccountintheoldbankandtransferanybalancestothedesignatedaccountatthenew bank.

-consumer’sconsenttotransferrelevantinformationdetailsfromtheoldbanktothenewbank.

12.2Abankshouldformallyacknowledgethetransferrequesttotheconsumerandcompletethetransferwithinsevenbusinessdays.Thebankcannotexertunduepressuretocancelthetransferrequestunlesstheconsumerhasunfulfilledcommitmentswiththeexistingbank.

12.3Abankshouldprovideaclosingstatementofaccountandletterof‘noliability’toaconsumerwhoistransferringtheiraccounttoanotherbank,withinsevenbusinessdaysofclosingtheaccount.


13. Bank Cards, Credit Cards and Point of Sale (POS)

13.1AbankwillonlyprovideanewATMcardonwrittenrequestfromtheconsumerorfromanauthorisedperson.Areplacementcardcanbeissuedbeforeexpirydateorasrequestedbytheconsumer.

13.2Abankwillensurethatcardsareissuedanddeliveredtotheconsumernamedonthecard,ortoanauthorisedperson,inaccordancewithSAMAcirculars.

13.3Abankwillprovideappropriateelectronicchannelsandfree-phonetoassistconsumerstoeasilyreportloss,theft or misuse of their cards.

13.4Abankshouldfullyinvestigateproblems,complaintsandclaimsfromconsumers,regardingincorrecttransactionsoranydifficultiesencounteredwhenusingany‘AutomatedTellerMachine’(ATM)or‘PointOfSale’(POS)andtake corrective action in accordance with SAMA circulars related to this.

13.5Abankshouldnotissueacreditcardorincreaseacreditcardlimitexceptuponthewrittenrequestoftheconsumer,accordingtotheregulationsandcircularsissuedbySAMArelatingtocreditcardsanddebitcards.

13.6 A bank should not discriminate regarding the issuance of credit cards to consumers and the approval or rejection ofarequestforacreditcardshouldbebasedontheconsumer’sfinancialpositionandtheirabilitytorepay.

13.7AbankshouldinformconsumersoftheimportanceofprotectingATMcards,creditcards,secretnumbersandchequebooks.Theconsumershouldbeinformedoftheproceduresforreportingcasesoftheft,lossandfraud.

13.8Aconsumerwillberesponsibleforanytransactionsmadeontheircreditcardbeforetheyreportedthelossoftheircardtothebank.Theissuingbankisresponsibleforanyfraudulenttransactions(transferofcreditcardinformation)withouttheknowledgeofthecardholder,whethermadebeforeorafterthecardholderinformsthebank,exceptincaseswhichthebankprovesthecardholder’sresponsibilityforthesetransactions.

13.9Abankshouldemphasisetomerchantcustomersthattheycannotpassonorimposeanyadditionalfeesorcharges(merchantservicecharge)oncreditcardholderswhenconsumersuseacreditcardforpaymentofgoodsorservicesintheirstores.Thebankresponsibleforacceptingthemerchant’sdepositsshouldensuretheamountslodgedarealignedwiththemerchants’business.Thebankshouldfacilitatetrainingofmerchants’staffon the use of POS devices and provide them with the required rules and regulations to be followed.

13.10Abankshouldtakespecialcaretoensurethatcertainmerchants,suchastravelagencies,carrental,goldshopsandjewelryshopsdonotimposeadditionalfeesontheamountofthetransactionwhereaconsumerusestheircreditcard(suchasVisa,MasterCard,AmericanExpress)tocompletethepurchase.

13.11AbankwilladviseconsumersofthetransactionlimitsthatapplyatPOSandATMattimeofissue,reissueofcards,orwhentheselimitschange.

13.12Abankshouldinformconsumerstoavoidchoosingeasysecretnumbersforbankingservicesornumbersassociatedwithpersonaldatesandencouragethemtochangethesenumbersperiodically.


14. Internet and ATM Banking Services

14.1 A bank should take appropriate measures to ensure that all online banking channels are safe and secure. A consumerwillbecompensatedforanydirectlossesincurredasaresultofpoorsecuritycontrolsforthesechannels.

14.2Abankshouldprovideafreephonelinetohelpconsumerstoeasilyreportsuspiciousorunusualtransactionsor unauthorised access to their data or accounts.

14.3Abankshouldinformconsumersofalltransactionsontheiraccountsastheyhappen,bysendingafreeSMStomobilephone.Theyshouldapplymorethanoneevidenceofidentityverificationforelectronicservicesandadvise consumers regarding electronic fraud in accordance with SAMA circulars.

14.4AbankshouldverifythatallATMsandotherelectronicservicesmeettheneedsofconsumersandleadtofacilitating the completion of banking transactions according to the latest technologies available.

14.5AbankshouldprocesstheclaimsassociatedwiththetransactionsexecutedthroughautomatedtellermachinesinaccordancewithinstructionsandcircularsissuedbySAMAinthisregard.

14.6AbankshouldconductperiodicmaintenanceofallATMs,toincludeverificationofoperationandavailabilityatalltimes,preferablyreplacingATMsthathavebeenservicedformorethannineyears.

14.7AbankshouldusemodernandadvancedtechniquesinmonitoringtheperformanceofATMsremotely.

14.8Abankshoulduseundamagednotesandwithdrawdamagednotesfromcirculation,especiallywhenreplenishingautomated teller machines.


15. Consumer Finance

15.1BanksarecommittedtopersonalfinancecontrolsandotherrelevantregulationsandcircularsissuedbySAMA.

15.2Beforeagreeingtograntaloanoranyothertypeoffinancefacilitiesforaconsumer,abankshouldassessthestatusoftheconsumer’screditratingandensuretheirabilitytorepaytheloanamountbasedontheconsumer’scurrent situation.

15.3 A bank will deduct the installment on the date agreed upon with the consumer and in line with the date of depositoftheconsumer’ssalaryaccountwiththebank.

15.4Eachbankbranchshouldhaveadesignatedcreditcounselortoassistconsumerswhoreportthattheyareencounteringadifficultywithrepaymentstotheirconsumerfinanceaccount.


16. Letter of ‘No Liability’

16.1Aconsumerisentitledtotransfertheirsalarytotheaccountofanyotherbankoftheirchoiceintheabsenceoffinancialcommitmentstoanexistingbank.Abankshouldissuealetterof‘noliability’totheconsumernolaterthansevenbusinessdaysfromthedateofreceiptoftransferrequest,andwithin30businessdaysinthecaseofacreditcard,withtheexceptionofcasesinvolvingthecourts.

16.2Abankshouldgiveclearwritteninformationtoconsumersregardingtheconsequencesthatnon-paymentoftheirliabilitieswillhavefortheircreditrecordintheinformationheldbycreditinformationcompanies.

Intheeventthataconsumerpartlypaystheirindebtedness,banksshouldnotissuealetterof‘finalclearance’.Theyshouldavoidusinganysuchphrasesorwordsintheircommunicationwiththeconsumerunlesstheconsumerhasfullypaidofftheirliabilitiesorunlessthebankisagreeabletoacceptapartialpaymentinfullandfinalsettlementofallamountsdue.

16.3Whencommunicatingwithconsumerstoencouragethemtosettletheiroutstandingamounts,abankshouldalwaysadheretoSAMAcircularsregardingthisprocess,whichincludestheresponsibilitiesofbankemployeesandemployeesofanyoutsourcedcompanyorthirdpartywhoisactingonbehalfofabank.


17. Employees

17.1Abankwillensurethatemployeeswhohavedirectinteractionswithconsumersshoulddothefollowing:-

a)competently,efficientlyandprofessionallydischargetheirdutiesandprovidethebankingservicestheyareentrusted to provide.

b)displaygoodbehaviorsanddealprofessionallywhenprovidingservicetoexistingorprospectconsumersatall times.

c)havefullknowledgeofbestbankingpracticessothattheycanhelpconsumers.

17.2Abankshouldensurethatitsemployeeshaveaccesstotrainingandachievetherequiredlevelsofcompetencybyenrolmentinspecialisedprogrammesforprofessionalaccreditationthatqualifiesthemtodealwithconsumers.


18. Foreign Exchange Transfers

18.1 A bank has the right to impose fees on consumers for the transfer of funds outside the Kingdom. These fees shouldbeafixedamountandnotapercentageoftheamountbeingtransferred.Anybeneficiarybankfeesshouldbeincluded,aswellasanyfeesimposedbythecorrespondentbank.Theconsumershouldbeinformedoftheamountofallfeesbeforeconfirmingthetransferoffunds.

18.2Abankwillberesponsibleforvalidatingthepaymentinstructions,specificallytheInternationalBankAccountNumber(IBAN),andBankIdentifierCode(BIC),beforecompletingthetransferofthefunds.

18.3Beforecompletingthetransferoffunds,abankshouldadviseconsumersoftheexpectedarrivaltimethatthefundswillbewiththebeneficiaryandthefeesorchargesdeductedandthenetamountthatwillbepaidtothebeneficiary.

18.4Abankshouldadviseaconsumerwithintwobusinessdaysofreturnoffundsbyacorrespondentbank.Thefundsreturnedshouldbecreditedtotheconsumer’saccountassoonasreceivedfromthecorrespondent.Wheretheconsumerisnotanaccountholder,thereturnedfundsshouldbeavailableincashorbycashier’schequewithintwobusinessdays.

18.5AbankshouldexplaintotheconsumerthatmakinganATMcashwithdrawalforinternationalcurrencyoutsidetheKingdomissubjecttotherequiredcurrencyexchangerateasatthedateofthewithdrawaltransaction.

18.6 A bank should ensure that where an advertised product or service is denominated or priced in a foreign currency,orwherethevalueofanadvertisedproductorservicemaybedirectlyaffectedbychangesinforeignexchangerates,theadvertisementcontainsthefollowingwarningstatement:“Thisproduct/servicemaybeaffectedbychangesinforeigncurrencyexchangerates”.


19. General Terms

19.1Abankshouldprovideahardcopyofthe‘BankingConsumerProtectionPrinciples’tonewbankingconsumers,ortoexistingconsumerswhotakesoutanewproductorservice.Anelectroniccopyshouldbealsoavailableontheir website for all consumers.

19.2Abankwillprovideacopyofthefollowingdocumentswithinsevenbusinessdays,orasotherwiseformallyagreedwiththeconsumer,basedontheconsumerrequest:

•Acopyoftheoriginalapplicationforanyproductorservice.

•Acopyoftheuptodatetermsandconditions.

•Acopyofthecreditcontract,includingsecurityandguaranteedocuments.

19.3Banksshouldtakehumanitarianreasonsintoconsiderationwhendealingwithconsumerswhohaveemergencyfinancialdifficulties.

19.4Abankshouldadviseitsconsumerswhohavefinancialdifficultiesandtrytohelpthemtoovercomethesedifficultiesbeforeproceedingwithlegalactionagainstthem.

19.5Abankwilldisplaythebranchhoursofbusinessonafixednoticeatthemainentrancetoeachbranchandontheir website and the branch should open and close in accordance with the advertised hours of business.

19.6Abankwillnotdiscriminateagainstconsumersinanyway,inthesaleorusageofanybankingproductorservice.


PART 4: ERRORS AND COMPLAINTS

20. Errors 20.1Abankisnotentitledtobenefitfromanyamountsduetoanerror,thesumshouldbereturnedtotheaffected

consumer’saccountwithoutdelayandwithoutwaitingfortheconsumertoregisteraclaim.

20.2Whereabankdiscoversanerror,orisinformedofanerrorbyaconsumermakingacomplaintoraclaim,thenthebankshouldrefundallotherconsumerswhoareproventobeaffectedbyasimilarerror.Thisshouldbecompletedwithin60businessdaysoftheoriginalerrorbeingidentified.Thebankshouldissueacommunicationtoallaffectedconsumers,advisingthemoftheerrorandthestepsbeingtakenforcorrectiveaction,includingtheamountoftherefundtotheconsumers’accounts.

20.3Abankshouldensurethecontinuityofbankingsystemstomeettheconsumers’needsatalltimes,andtoprovide alternatives when a defect or malfunction occurs.

20.4 Onconclusionofacomplaintorerrorinvestigation,oronreceiptofaninstructionfromahigherauthority,anyrefundsormonetarycompensationduetoaconsumershouldbecreditedtotheconsumer’smoneytransmissionaccountwithinfivebusinessdays.Incertainexceptionalcircumstanceswhenalongerperiodoftimemayberequired,theconsumershouldbeadvisedoftheexpectedtimeforcreditingoftheamountdue.

21. Complaints

21.1 AbankshouldcomplywiththerulesandregulationsforcomplainthandlingasissuedbySAMAandshouldacknowledgereceiptoftheconsumer’scomplaintandsendthemacomplaintreferencenumbertotheirmobiletelephone for follow up.

21.2Abankshouldclearlydisplaytheircomplaintsproceduresinalloftheirbranchesandontheirwebsitesandprovideahardcopytoaconsumerifrequested.

21.3Abank’scomplaintsproceduresshouldincludethefollowing:

a) howtomakeacomplaintandthedocumentationrequired,includingtheconsumer’srighttomakeacomplaintdirectlytoabranch,tothebank’scallcentre,byfax,throughthebank’swebsiteorusinganyotherchannelmadeavailablebythebank.

b) thatbankmanagementtakeresponsibilityfortheinvestigatingofcomplaints.

c) theofficialnameandphonenumbertobeusedbytheconsumerwhentheyneedtofollowupacomplaint.

d) thattheexpectedtimeperiodforthebanktorespondtotheconsumerwithadecisiononthecomplaintthatwouldnotexceed10businessdaysfromthedateofregistrationofthecomplaint.

e) thebankshouldcommunicatewiththeconsumerregardingthecomplaintwithinoneweekfromthedateofreceiptintheabsenceofresolutionduringthisperiod.Ifthecomplaintisnotresolvedinoneweek,thebankwillcommunicateandupdatewithin10businessdaystoadvisehowlong(itisexpectedthatresolution will take.

f) abankshoulddocumentthechannelusedtocommunicatewiththeconsumerandretaindetails.

21.4Abankshouldprovidetheinformationrequiredbyaconsumerwhowishestoescalatetheircomplaintwithinabankortoathirdpartyasaresultofbeingdissatisfiedwiththeresultoftheircomplaintanddirectthemtotheappropriatethirdpartyrelevantfortheircomplaint.


15/08/1430

20/10/1430

27/05/1431

29/06/1423

13/03/1424

05/03/1430

03/07/1431

19/03/1432

10/06/1430

20/04/1428

05/04/1415

07/08/1428

02/02/1425

21/10/1422

26/11/1423

02/01/1428

01/07/1430

13/03/1423

26/10/1415

04/09/1427

12/03/1427

10/07/1432

10/07/1432

04/01/1431

40690/MAT/789

51224/MAT/995

27780/MAT/13135

MAT/150

5790a/AT/97

11374/MAS/207

33703/MAT/15969

14547/MAT/6442

29209/MAT/552

903/MD/MAT

4225/MA/146

32777/MAT/618

3205/MAE/33

19109/MAQ/S166

25150/MAT/272

251/MAT/3

33043/MAT/644

MAT/60

12974/MA/655

32275/MAT/516

9367/MAT/141

34736/MAT/15864

34734/MAT/15865

17456/MAT/8211

PART 5: RELEVANT INSTRUCTIONS ISSUED BY SAMA

22. Circulars

Circular Number Date Issued