Saudi Central Bank Bans Promissory Notes for Credit Card Financing
New directive aims to enhance consumer protection by banning promissory notes in credit card financing and mandating corrective action by banks.
- Publish date: Tuesday، 30 December 2025 Reading time: two min read
The Saudi Central Bank (SAMA) has issued a landmark directive banning the use of promissory notes and other commercial papers from individual customers as part of credit card financing, in a move aimed at bolstering customer protection and improving financial sector practices.
Under a recent circular, all banks, local lenders, and finance companies operating in the Kingdom have been instructed to cancel previously issued promissory notes linked to credit card products and stop requesting such documents for new credit card financing applications.
SAMA has set a deadline of 2/1/1448 AH (Islamic calendar) for financial institutions to complete the cancellation of existing promissory notes associated with credit cards.
The regulator’s intervention follows its monitoring of a growing use of promissory notes in the market — a practice it says could pose risks to consumer rights and financial transparency. In response, SAMA has mandated that institutions update their internal policies, procedures, and controls to comply fully with the new requirements.
As part of the directive, banks and finance companies must submit a corrective action plan within 30 days to SAMA’s Customer Protection Supervision Department. This plan should outline how existing situations involving promissory notes will be addressed and should include measures to return or cancel commercial papers previously obtained from individual customers.
Implementation of the corrective measures is expected to be completed within six months from the date of the circular’s issuance. SAMA emphasized that the ban reflects its ongoing commitment to strengthening customer protection and promoting fairer financing practices across the financial sector.
This decision aligns with broader regulatory efforts in Saudi Arabia to modernize financial services, enhance transparency, and safeguard the rights of consumers in an evolving economic environment.