“Okaz” sources revealed that the Central Bank is preparing to issue a set of rules for regulating and licensing postpaid companies that include regulatory provisions, others related to obtaining a license to practice activity, and technical and organizational provisions for activity, such as internal policies and procedures, information security requirements and combating financial crimes, as well as Regulatory obligations aimed at protecting the customer, establishing activity and credit limits, supervision and compliance provisions.
And the sources reported that the rules define the volume of financing, its conditions, and the payment mechanism according to electronic channels, and prohibit accepting funds in cash, in addition to imposing a 50% localization in financing companies, increasing by 5% annually, and allowing the use of non-Saudis to work in postpaid companies according to regulated conditions and controls.
The Central Bank continues to survey the opinions of specialists about the legal provisions of the rules, and the time allotted for the survey ends at the end of this month, and the rules that are still under study apply to companies licensed by the Central Bank to practice activity.
The rules aim to define the procedures and requirements necessary to obtain a license to practice the activity and set the minimum standards and procedures necessary to practice the activity. And according to the draft rules regulating post-paid companies, the application for a license to practice the activity is submitted to the Central Bank, accompanied by the application form for the license after completing the necessary requirements, and the minimum capital of the company is five million riyals, and the Central Bank has the right to raise or reduce the minimum capital as it deems appropriate.
The draft rules for regulating postpaid companies stipulated that every person nominated for supervisory and executive work in the company must be a permanent resident of Saudi Arabia, theoretically and practically qualified, and have appropriate experience in the same field, and that he should not have violated the provisions of the Banking Control Law or the insurance company control system. Cooperative, financing systems, or the financial market system and its regulations, and not have been convicted of any crime involving breach of trust, in addition to any other conditions or requirements set by the Central Bank.
The rules revealed licensing procedures, and the Central Bank notifies the license applicant in writing of the initial approval or reasoned refusal within (60) sixty working days.
The rights of the creditor and the customer
According to the rules, the Central Bank may take the necessary measures to verify that companies meet the requirements, including carrying out licensing visits to the company’s headquarters, meeting its officials, and examining its systems, procedures, and records. The Central Bank issues a decision to grant the license to practice the activity after fulfilling all the procedures and requirements. It is not licensed to practice it, except after obtaining the approval of the Central Bank, and the term of the license is specified for five years, and the application for renewal is submitted in writing at least three months before its expiry date, and the Central Bank may cancel the license based on the company’s request, taking into account the rights of the creditor and the customer and the integrity of the financial system The Central Bank has the right to collect a fee of five thousand riyals for issuing the license and two thousand riyals for renewing or amending the license.
Evidence for combating terrorism and money laundering
The rules for regulating postpaid companies revealed that the company should set appropriate and written regulatory policies that include, at a minimum, evidence of internal organization, governance, procedures for approving purchase requests, credit, risk management, compliance, confidentiality and security of information, assignment of tasks, human resources, and combating Money laundering and terrorist financing, and the technical and security equipment and related systems must be sufficient for the operational needs of the company, the nature of its activity, and the status of its risks, in accordance with best practices, and in accordance with what is issued by the Central Bank in this regard, and the company must design information technology systems and procedures related to them In a manner that guarantees the availability, integrity, integrity and confidentiality of information, and all client documents, records and files must be kept in an organized, clear and secure manner, for a period of at least (10) years from the date of termination of the relationship with the client.
Localization of human resources
The rules regulating postpaid companies indicated that the percentage of human resources localization should not be less than (50%) when the company starts its activity, at the level of departments and administrative levels, and the localization of human resources must be increased annually by at least (5%) of the total resources until the percentage is reached (75%), and the Central Bank may set a minimum annual increase in the Emiratisation percentage required thereafter. According to the draft rules regulating post-paid companies, the company must adhere to the principles of responsible financing for individuals issued by the Central Bank, and examine the customer’s credit record, after his approval, to verify his financial solvency, ability to fulfill, and credit behavior, and document that, and record the customer’s credit information, after his approval, with One or more companies licensed to collect credit information, in accordance with the provisions of the relevant laws, regulations, and instructions, and to update that information throughout the period of dealing with the customer, and to make appropriate declarations and undertakings for the customer’s knowledge and approval before dealing with him, provided that the declarations are in the form of a pop-up window, and follow A scientific method and clear, transparent and written standards and procedures for evaluating the creditworthiness of the customer and his ability to repay, according to best practices in this field. In addition to identifying the customer and verifying his identity through a reliable and independent source and documenting this in accordance with the instructions issued by the Central Bank. With limiting the provision of its services to traditional or electronic stores licensed to operate in Saudi Arabia from the relevant competent authorities. And keep provisions for potential losses, defaults or risks, in accordance with international accounting standards and what is determined by the Central Bank.
activity prohibitions
According to the rules regulating post-paid companies, the company is prohibited from five things, which are: launching any new products without obtaining the Central Bank’s prior written non-objection, presenting the activity to a customer who has not exceeded the age of eighteen Hijri years, imposing delay fines that exceed the amount due and a maximum premium value One for each contractual relationship with the customer, presenting the activity to a foreign customer who is not residing in the Kingdom, except after obtaining the central bank’s written non-objection, purchasing goods or services in a currency other than the Saudi riyal, except after obtaining the central bank’s written non-objection. The rules stressed that the company should prepare a customer due diligence program, and comply with the regulations and instructions for combating money laundering and terrorist financing. The customer due diligence program must include – at a minimum – policies and procedures related to the principle of knowing your customer and information security. And the privacy and confidentiality of data. The rules emphasized that the company must comply with the provisions of the electronic transactions system and its implementing regulations, and set the necessary procedures and measures to ensure the correctness and up-to-date information, which includes – as a minimum – verifying the validity of the customer’s phone number by sending the authentication code, and setting the necessary procedures to ensure the validity and up-to-date information. Introduction, including the national address.
20 times the capital
The rules regulating postpaid companies indicated that, without prejudice to the deductibles specified in the principles of responsible financing for individuals, the credit limit granted to each customer should not exceed the amount of five thousand riyals in each purchase, and the Central Bank may increase or decrease the amount as it deems appropriate, and it must not The repayment period exceeds a maximum of six months, and the means of collection are limited to electronic channels, and it is prohibited to request cash, and the total financing made through the company may not exceed twenty times the capital and reserves, except after the approval of the Central Bank, and the Central Bank may increase or decrease the upper limit to the total financing to the extent it deems appropriate.
Credits for actual needs
With regard to the advertising requirements, the company must comply with the advertisement including the company’s name, logo, any distinctive statement and contact information, and it is prohibited to submit an advertisement to the customer that includes a false offer, statement or claim, or that is formulated in terms that lead, directly or indirectly, to Deceive or mislead the customer. It is also prohibited to submit an advertisement that includes excessive encouragement of obtaining credit for unnecessary consumption purposes instead of actual needs, and the Central Bank has the right to oblige a company that does not comply with the conditions to withdraw the advertisement within one working day of notifying the Central Bank of that.
The draft rules regulating postpaid companies stressed that the company should take sufficient measures to limit and deal with conflicts of interest to ensure fair dealings with the customer and stores. The company must clarify and disclose all terms and conditions, security instructions, payment methods, confidentiality of information, and any other data that must be disclosed according to the relevant regulations and instructions, in addition to disclosing all fees due to a third party that the company wishes to charge the customer – if any – for Benefiting from the company’s services, such as fees for identifying the customer and verifying his identity, and fees for verifying the financial solvency of the customer. As well as disclosing company licensing information.
Supervision and compliance
The rules regulating post-paid companies stressed that companies are obliged to provide the Central Bank with any reports, data or information it requests, and to follow international accounting standards in preparing their accounts and financial statements. Submitting all information and documents related to the company, its activities, partners, and employees to the Central Bank. Refraining from providing what the Central Bank has requested is a violation of the provisions of the system and rules. Companies or their employees are prohibited from concealing or attempting to conceal any information or abuses, or refraining from answering any inquiries requested by the Central Bank. The Central Bank may take the necessary measures to verify the company’s compliance with the relevant regulations, rules, regulations, and instructions, including carrying out supervisory or inspection visits to the company’s headquarters, interviewing its employees, and examining its systems, procedures, and records. The company shall bear the costs of any third party appointed by the Central Bank to undertake any of the measures taken in accordance with the provisions of this Subject.
Information security and combating financial crimes
The rules stressed that the company must comply with the requirements set by the Central Bank regarding information security and related systems, regulations and instructions, in addition to complying with the statutory requirements contained in the Anti-Money Laundering Law, the Law on Combating Terrorist Crimes and Its Financing, their executive regulations, and the relevant rules and guidelines, as determined by the Central Bank. And in accordance with the nature of the company’s activity, its size and the level of risks it may be exposed to, in addition to complying with the requirements and instructions related to financial crimes.
The draft rules for regulating postpaid companies stressed that the company should protect the customer and ensure the confidentiality of data by establishing a job to handle complaints, and setting clear procedures for receiving, documenting and studying them, and responding to them within the period specified by the Central Bank, while preserving the confidentiality of customer data and operations, and not disclosing them or Disclosing it or reporting it even after leaving work or revoking the license, except as required by regulations and instructions.
