All the information you need to make the process smoother
17 July 2017| Last updated on 17 July 2017
If you’re unsatisfied with your current bank and you would like to change to another, here’s what you should know.
Banking in Saudi Arabia is a bit different than banking in most European or Western countries. It can be a bit complicate as there are many agreements between employers and banks. Generally, your employer will have a payroll agreement with their preferred bank and all their employees will have to have their salaries deposited at that same bank.
While you can choose to have additional bank accounts with any banks that you want, the transfer of your salary will be restricted to the banks that your employer has a relation with. However, you can request from your employer if they would have no objection to using a different bank.
Another obstacle you might face is if you have debt with your current bank. You might need to completely pay off your debt with the bank before you’re able to transfer your salary to another bank.
Refinancing your debt
According to SAMA regulations, you’re eligible for refinancing one you have repaid at least 20 per cent of your borrowed money.
Most banks tend to offer buy-over financing, which simply allows you to end your financing with your bank and then move it to the new one.
Your eligibility for buy-over financing will depend on several factors, including salary, financing amount and sector of employment.
SAMA regulations state that all customers hold a right to switch to a different bank if all debts at the current bank are settled.
In order to change banks, you’ll first need to make sure that the bank you’re switching to is willing to buy-over your current financing. Following that, you should inform your current bank of your wish to leave.
Then, you’ll need to make sure that the debts are in fact settled with your bank. Sometimes, the new banks might just issue a managers cheque to settle your debts, then once that’s settled, your financing will be transferred to them.
You will need to submit a “Letter of No Liability” to your new bank following the closure of your debts. This document is a requirement to complete the process. Finally, you will need to reassign your salary to your new bank.