Compliance with standard forms for real estate financing contracts in Murabaha and Ijara formats for individuals

In the Name of Allah, the Most Gracious, the Most Merciful

Saudi Central Bank
Head Office

General Directorate for Supervision of Financing Companies

Ref. No.: 391000082220
Date: 23/07/1439 AH
Corresponding Date: 10/04/2018 AD
Attachments:
Approval and Review

Circular

To:
Peace, mercy, and blessings of Allah be upon you.

Subject: Standard Form for Individual Real Estate Financing Contract under Murabaha Format and Individual Real Estate Financing Contract under Ijara Format

Based on the authorities granted to the Bank under the Banking Control System issued by Royal Decree No. (5/M) dated 22/02/1386 AH, and the Financing Companies Control System issued by Royal Decree No. (51/M) dated 13/08/1433 AH, and under Paragraph (2) of Article (Eight) of the Executive Regulations of the Real Estate Financing System, which stipulates that "the Bank shall establish standard forms for real estate financing contracts, and real estate financiers shall comply with those standard forms unless otherwise specified", and under Paragraph (2) of Article (Ten) of the Executive Regulations of the Financial Leasing System, which stipulates that "the Bank shall approve standard forms for financial leasing contracts that consider the rights of the concerned parties".

And in pursuit of the Bank's objectives to achieve the goals of standard contract forms and realize the principle of fairness among real estate financiers, real estate financiers must comply with the standard form for individual real estate financing contracts under the Murabaha format (as a minimum) and the standard form for individual real estate financing contracts under the Ijara format (as a minimum), and complete the necessary procedures according to their adopted policies, including Shariah Committee approval, by no later than 10/09/1439 AH corresponding to 25/05/2018 AD, and shall not enter into any contracts that contradict the attached standard contract forms after this date.

For your information and compliance.

Yours sincerely,

Ahmed bin Abdullah Al Sheikh
Deputy Governor for Supervision

Distribution Scope:

• Banks and commercial banks operating in the Kingdom.
• Real estate financing companies operating in the Kingdom.

P.O. Box 2992, Riyadh 11169, Tel: +966 11 4662020, Fax: +966 11 4662488