JEDDAH: Saudi banks have frozen the accounts of three defaulted clients who failed to meet the deadline to pay their debts for three years, a local publication reported.

This came after the rise in the cases of evasion of payment.

Banking sources said the banks took this stringent step toward clients as those associated with bank loans resorted to opening new accounts in other banks without clearing the old debts, which drove banks to resort to time-consuming litigation and delays repayment.

The sources noted that the new mechanism will be through adjudication forcing the defaulters to repay their loans. The judicial systems and the instructions of the Saudi Arabian Monetary Agency support this drive to maintain the lawful rights of banks and to alleviate bad debt.

Talat Hafiz, secretary general of Media and Banking Awareness Committee of Saudi Banks asserted that banks have no intentions to write off the debts of individuals.

A recent survey showed a decline in the coverage of defaulted debts by 172 percent at the end of the year past, compared with 183 percent in 2014.

The survey said that the defaulted loans have increased by 10 percent to $ 4 billion at the end of last year, while three banks recorded a decline in the size of its defaulted loans compared to last year, with Samba bank recording the maximum decline by 33 percent.

Non-performing or defaulted loans now involve nine banks with Al-Ahli Bank in the lead with 29 percent, followed by Riyad Bank, Al-Rajhi Bank, and Alinma Bank with 26 and 23 and 22 percent respectively.