JEDDAH, 18 February 2004 — Saudi banks blacklisted some 140,000 clients by the end of last month, Al-Eqtisadiah business daily, a sister publication of Arab News, reported yesterday quoting a high-level banking official.
The official said the number of blacklisted clients rose by 28 percent during the last three years mainly because of an increase in the number of credit card and loan defaulters.
“The blacklisted clients will not receive any credit cards or loans from any banks and they will not be able to transfer their accounts from one bank to another,” the official said.
Most Saudi banks suffer from defaulters, especially on credit cards and personal loans. This has forced them to either transfer cases to their own debt collection department or to organizations specializing in retrieving such funds.
Many clients said there were surprised to see their names on the blacklist of banks with which they never had any transactions. On approaching the bank they realized that it was because of they had stood as guarantors for friends and relatives who defaulted.
Some said they had suffered financial losses for being on the blacklist through no fault of their own. Even clients who paid their dues have been denied banking services for being on the defaulter list in the past. Defaulters are generally offered cuts or rescheduling of debts if they owe large sums. If a client violates an agreement with the bank, his name will be put on a blacklist, which prevents him from receiving any financial services from any bank.
The name remains on the list until the client pays his dues, the official said. “Generally, such clients will be forced to come to an agreement with their banks after several years when they are badly in need of loans or other financial services,” he added.