Glossary of Terms & Abbreviations
Credit Card
A card whereby its holder can previously obtain cash, goods or services from commercial establish- ments locally or internationally, provided that the cardholder pays the due amount later or as agreed.
Consumer Financing
It is granted to individuals in order to fulfill customers’ needs. It is often granted based on salary received by the beneficiary or personal or other in-kind guarantees as required by the card issuer.
Real Estate Financing
It is granted to the customer for construction or purchase of housing or commercial units or purchase and development of housing lands as well as other relevant activities.
Finance Lease
Each contract whereby the lessor leases immovable or movable asset, facilities, services or intan- gible rights as being the owner of the same or benefits thereof or able to own or establish the same, if the main purpose sought by the lessor is to professionally lease the same for others, shall be considered as a finance lease
Digital Certification Services
Digital Certification launched by SAMA on 12/04/2020 AD attempts to provide an integrated system to manage the public key’s infrastructure whereon all online activities such as e-commerce and online governmental transactions are based. This system enables various online customers including government, citizens or business to conduct all various online transactions in a confi- dential and reliable manner.
Charge Card
A card that is similar to the credit card, but obligates its holder to pay the full due amount upon receipt of the statement of account or on the due date stated in the statement of account.
Corporate Card
A Credit or charge card issued to an employee or officer of a corporate entity.
Business Card
A credit or charge card issued for the purposes of purchasing goods or services on behalf of a corporate entity, where the corporate entity bears liability for all amounts charged to the credit or charge card.
Card Association
Operators of payment system, such as: VISA, Master Card, American Express, UnionPay, Diners Club or other similar bodies.
Cash Withdrawal
A cash withdrawal made by the credit or charge cardholder using the card such as cash with- drawal through POS or mega retailers.
Credit Information Company
A national licensed credit information company that renders services related to consumer and
Default
The Cardholder’s non-compliance with terms and conditions of credit or charge card agreement, resulting in non-payment of the monthly installment by the cardholder for 90 calendar days as from the due date.
Fraud
A deliberate act to dishonestly obtain a benefit (i.e. receive cash, product or service).
Grace Period
The date or period during which the credit amount paid for purchase may be paid without any consequent commission or profit fees due to charge of a periodical commission or profit rate.
Initial Disclosure
The information required to be provided to the cardholder by a card issuer upon opening a credit or charge card account.
Real Estate Financing
It is granted to enable the beneficiary to own a real estate.
Real Estate Financing Contract
It is a deferred payment contract to enable the beneficiary to own a real estate.
Real Estate Financing Company
A joint stock company licensed to engage in the real estate financing activity.
Real Estate Financer
Commercial banks and real estate financing companies, which have the license to involve in real estate financing activity.
Housing Subsidy
A financial or credit aid provided by the State or housing societies or others in order to facilitate housing matters.
Real Estate Refinancing Company
A joint stock company licensed to engage in the real estate financing activity.
Customer Credit Report
Customer Credit Report is an integrated and comprehensive report comprising all details of cus- tomer’s credit transactions with creditors. Such a report contains the obtained financial products such as loans and credit cards, as well as the relevant information such as maturity date, install- ment amount and status of payment.
Debt Burden Ratio (DBR)
DBR means the extent to which the customer is liable for payment of monthly installment based on the customer’s monthly salary or income.
Credit Model (P5):
Such a credit model includes 5 key customer-related criteria that start with ‘P’ letter, namely Peo- ple, Payment, Purpose, Protection, and Prospective.
Financer
Banks and financing companies supervised by SAMA and licensed to practice one or more of financing activities.
Finance amount
Maximum or total amounts available to be utilized by the customer subject to the financing contract.
Term Cost
Term cost due and payable by the customer under the Financing Contract; this may be expressed as a fixed or variable annual percentage of the Financing Amount obtained by the Customer.
Variable Term Cost
A term cost to be determined based on a clear certain reference index established in the Financ- ing Contract, while such cost changes as the index changes.
Compliance Department
An independent function that identifies, advises, monitors and prepares reports on the bank’s non-compliance risks that may lead to statutory or administrative penalties, financial losses, or may harm the bank’s reputation as a result of violating laws, controls, codes of conduct and sound professional practices.
AML/CTF Compliance Department Officer
AML/CTF Compliance Department Officer must ensure that the bank applies AML/CTF rules and KYC (Know Your Customer) principles, particularly rules for opening bank accounts and general rules for operation of such accounts and technical supervision of the function estab- lished in the bank for that purpose.
AML Officer
The bank’s AML Officer shall be responsible for coordinating and monitoring daily compliance with AML Policy and applicable laws, rules and regulations.
Audit Unit Officer
An independent Audit & Review Unit with sufficient resources that is established to monitor com- pliance with procedures, policies and controls according to risk rate standards, as per Article 12 of Anti-Money Laundering Law applicable to financial institutions, businesses, certain non-financial professionals and non-profit organizations.
Investment Credit
The credit sought by customer to finance his long-term operations, which aim to obtain produc- tion means and equipment or Real estate, such as land, industrial, commercial, and administrative buildings.
Commercial Credit
The customer aims to finance his business for the purpose of purchasing goods for trading.
Objectives (Goals):
Objectives are the results that are sought to be achieved through the Program and Plan. Ob- jectives are defined as outcomes or purposes sought to be realized by the Department. Such
changes required in persons’ performance and behaviors along with objectives sought by the fi- nancial institution within a certain period.
Personal Development Plan (PDP)
PDP is known as a simple process of developing a plan to promote specific skills or knowledge so that individuals can apply them professionally and consistently in their workplaces.
Maslow’s Hierarchy of Needs
Maslow’s hierarchy of needs refers that humans always have certain needs and such needs affect the human’s behavior; as the unfulfilled needs cause tension, therefore humans seek to fulfill them.
Goal Setting Theory (Edwine Locke)
This theory’s founders, the most famous of whom is “Edwin Locke”, believes that “clear definition of goals and objectives for both organizations and individuals is very useful to improve and en- hance organizational and personal performance while individuals make a greater effort when they have organizational goals. Furthermore, individuals like to have a specific goal in mind in terms of performance to achieve such a goal. Achievements of the goal is a target itself. Luke Waltham believes that the goal must be beneficial to the individual and must have a degree of challenge, meaning that it shall be neither too easy nor too difficult to motivate workers to accomplish. The goal should be clearly defined and preferable related to a reasonable period of time.
Performance Record
The Manager constantly registers employees’ performance in this record over the measure- ment period, whether for or against the employees, throughout the work period. Constant registration does not mean registration of each step by the employee, but registration of im- portant events affecting the employee’s performance, so that each manager can fully complete the assigned task. The Manager is advised to have a notebook in his office to write down the daily observations; each page shall be designated to every employee and divided so that all required data are written down.
Balanced Score Card
Balanced score card is to define, measure and develop individuals’’ performance and leverage their performance together with the establishment’s strategic objectives.
Work Incentives
Work Incentives are to stir up individual behavior in order to satisfy specific needs and to promote the desire to make a higher level of efforts in order to achieve establishment’s goals; provided that these efforts lead to satisfaction of some individual needs. The incentives are represented in two types: the financial incentives, which are reflected in cash or economic nature, which are one of the oldest types of incentives and characterized by rapid influence and effectiveness, and the moral incentives, which are the incentives that help a person to satisfy the psychological and social needs.
Work Ethics
A set of ethical standards, rules and behavior that an employee has to comply with and show to- ward his/her work, colleagues and the society as a whole.
Financial Institution
Banks, branches of foreign banks, insurance/reinsurance companies, foreign insurance companies, service providers, finance companies, financial lease registration companies and credit information companies, money exchangers centers operating in Saudi Arabia and supervised by SAMA.
FI Staff
Members of the board and its committees, executives, regular or contract employees, consultants and third party employees.
Stakeholders
Any person with an interest in the FI, such as shareholders, creditors, customers, suppliers and any third party.
Professional Behavior
Carrying out job duties with honesty, objectivity and integrity and working continuously to achieve the objectives of the FI. It also means that practices conducted by employees must be within their entrusted powers. Employees must perform their duties in a manner that is free from negligence, and must not violate laws and instructions, jeopardize the public interest or seek to achieve per- sonal interest.
Insider Information:
Any information, data, figures or statistics, whether verbal, written or electronic, obtained or accessed by any of the FI Staff by virtue of his/her work nature or because of being an em- ployee at the FI and which is/are not available to the public
Confidential Information or Data or Documents
Any information or documents that is/are not available to the public, including those related to the FI’s work, administrative and financial arrangements or financial position.
Conflict of Interests
A situation in which the objectivity and independence of any of the FI Staff are adversely affected when performing his/her tasks by a personal, actual or potential, material or non-material interest that may relate to him/her personally or to one of his/her personal relationships. This situation also includes when the employee’s performance is negatively influenced, directly or indirectly, by his/her personal considerations or after obtaining information related to a decision.
Personal Interest
Any personal benefit that can be realized by any of the FI Staff by virtue of their work nature, position or granted powers
Disclosure
Disclosing the cases that must be disclosed as determined by the Institution’s disclosure policy to the competent department at the FI by an employee.
Legal Accountability
Holding a person accountable for the acts he/she commits in contravention of the laws and pol- icies in force, and in such a way as to harm others or damage the interests of the institution in which he/she works.
APR AER FATF KYC P5 PDP CBP SMART S M A R T HRM BSC OM SOP
Annual Percentage Rate Annual Equal Rate
Financial Action Task Force Know Your Customer Credit Model
Personal Development Plan Certified Business Professional SMART Goals
Specific Measurable Achievable Realistic Timely
Human Resources Management Balanced Score Card
Operations Management Standard Operating Procedure