Regulatory Alerts2020-01-26
Updating the mortgage finance model contract for Individuals in Murabaha and Ejarah
The Saudi Central Bank issued this circular to update the mandatory model contracts for individual mortgage financing under both Murabaha and Ijarah structures. Financial institutions operating in the Kingdom must adopt the revised templates in accordance with their internal policies no later than 24 February 2020. All mortgage financiers are strictly prohibited from executing or amending any individual mortgage contracts that deviate from these updated model agreements after the specified deadline.
In the Name of Allah, the Most Gracious, the Most Merciful
Saudi Central Bank Headquarters Office of the Governor's Deputy for Supervision
Ref No.: 41038504 Date: 01/06/1441 AH Attachments: None
Circular
Dear Sirs,
Peace, mercy, and blessings of Allah be upon you,
Subject: Regarding the updating of the model contract for individual mortgage financing under the Murabaha structure, and the model contract for individual mortgage financing under the Ijarah structure.
In continuation of the Bank's Circular No. 391000082220 dated 23/07/1439 AH regarding compliance with the model contract for individual mortgage financing under the Murabaha structure, and the model contract for individual mortgage financing under the Ijarah structure. And with the Bank's commitment to achieving the objectives of the model contracts for individual mortgage financing, and safeguarding the rights of the concerned parties.
The Bank wishes to inform you of the update to the model contract for individual mortgage financing under the Murabaha structure, and the model contract for individual mortgage financing under the Ijarah structure. The Bank emphasizes that all mortgage financiers must comply with these attached model contracts according to their prevailing policies, by a deadline of 30/06/1441 AH corresponding to 24/02/2020 CE, and must not execute any contracts contrary to these model contracts or make any amendments to them after this date.
Yours sincerely,
Fahd bin Ibrahim Al-Shathry Governor's Deputy for Supervision
Distribution Scope:
- Banks and commercial banks operating in the Kingdom
- Mortgage financing companies operating in the Kingdom
P.O. Box 2992, Riyadh 11169, Tel: 4662200 - Fax: 4662543
(Note: The document contains detailed legal contract templates; the main text above has been extracted, and the remaining pages contain contract details and attached tables.)