SAMA cancels promissory notes for credit cards: Details of the decision and deadline

In a move aimed at enhancing financial consumer protection and regulating the relationship between lenders and customers, the Saudi Central Bank (SAMA) issued strict directives to all banks, financial institutions, and finance companies operating in the Kingdom, mandating the immediate cessation of requiring promissory notes or any other commercial papers from individual customers as a condition for obtaining credit card financing products. The bank emphasized in its circular the necessity for all financing entities to update their internal policies, procedures, and controls to comply with these new instructions.

According to the circular issued, the Central Bank has set February 1, 2026, as the effective date for this decision, obligating financial institutions to submit a comprehensive corrective action plan to the Customer Protection Supervision Department within 30 days of the circular's issuance. This plan must include, at a minimum, clear mechanisms for returning or canceling promissory notes and commercial papers previously obtained from individual clients that conflict with the new directives, provided that the corrective action plan is fully implemented within a period not exceeding six months.

This move by SAMA comes in response to the recent increase in the requirement for individuals to provide promissory notes when issuing credit cards, a practice that can impose an unjustified legal and financial burden on consumers. This step is part of the central bank's ongoing efforts to develop the financial sector, a key pillar of the Kingdom's Vision 2030, which aims to enhance transparency and fairness in financial transactions, protect customers' legal rights, and mitigate the risks associated with consumer finance products.

In a related development, the Saudi Central Bank continues to enact legislation that benefits individual customers. It is worth noting that in mid-2025, the bank approved a set of important regulations allowing customers to top up their e-wallets using credit cards free of charge. These regulations also addressed transaction fees, setting a cap on cash withdrawal fees from ATMs using credit cards at no more than 3% of the transaction amount, with a maximum fee of 75 riyals. Additionally, fees for transfers to current accounts were eliminated, reflecting the bank's commitment to providing a fair and attractive banking environment.

These successive decisions confirm the financial regulator’s keenness in the Kingdom to close loopholes that may be exploited against customers, and to ensure that the guarantees required for financing are proportionate to the nature of the product, far from the excessive use of commercial papers that have the characteristic of direct judicial enforcement.