IslamicFinance.de

Saudi Arabia’s central bank has published new consumer lending regulations which give it the power to cap retail lending at individual banks and limit the fees that banks can charge. The rules could dent profit growth at banks, especially those that rely heavily on retail activity. The regulations, published on the Saudi Arabian Monetary Agency’s (SAMA) website, state that SAMA may, at its discretion, impose a restriction on a creditor under which its consumer financing portfolio may not exceed a specified percentage of its total financing portfolio. They also state that all fees, costs and administrative services charges collected by banks must not exceed either 1 percent of the financing amount or SR5,000 whichever is lower.