Saudi king orders banks not to exploit new hardship allowances

Saudi Arabia’s King Salman has issued a directive for banks to not take advantage of new allowances designed to compensate workers for rising living costs.

The Saudi monarch ordered the monthly payment of SAR1,000 ($267) to state employees, SAR5,000 to military personnel in Yemen and a 10 per cent stipend increase for students studying abroad on scholarship programmes on Saturday.

The payments came days after the kingdom introduced a 5 per cent value added tax on goods and services and increases to fuel and electricity prices.

Read: Saudi students receive stipend increase

Read: Saudi king orders new payments to offset rising living costs

On Monday, King Salman directed the Saudi Arabian Monetary Authority (SAMA) to ensure that lenders do not deduct any amount from the allowances.

This included for the purpose of the repayment of loans or other financial obligations, according to Saudi Press Agency.

The package of handouts will cost the kingdom around SAR50bn ($13.3bn) this year, an official said on Sunday.

Read: Saudi handouts to cost about $13bn
The kingdom has also allocated SAR30bn for a household allowance scheme to help citizens in low and mid income families weather cost increases.

Read: Saudi makes first $533m payment to