Regulatory Alerts2019-06-27
Added · Updated
Circular on the Abolition of the Investment Risk Countermeasure Fund for Islamic Banks
The Central Bank of Saudi Arabia abolishes the Investment Risk Countermeasure Fund for Islamic Banks, requiring the distribution of its balance into provisions for specific receivables and non-performing financings as of April 30, 2019. Effective May 1, 2019, provisions against assets funded by joint investment account holders must be charged against pool returns, while any fund surplus is retained as an expected credit loss provision. Islamic banks must modify their policies regarding profit rate reserves and loss-bearing mechanisms to align with Article 55 of Banking Law No. (28) of 2000, submitting the revised policies for prior approval within two months.
Topics
islamic-finance
capital
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