Licensing Banks to Engage in Real Estate Finance or Finance Leasing Activities

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

Saudi Central Bank
Headquarters

Office of the Deputy Governor for Supervision

No.: 67/22129
Date: 09/04/1440 AH
Attachments: None

Circular

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

Subject: Licensing Banks to Engage in Real Estate Finance or Finance Leasing Activities

Based on the authorities granted to the Bank by the Banking Control System issued by Royal Decree No. (M/5) dated 22/02/1386 AH, the Financing Companies Control System issued by Royal Decree (M/51) dated 13/08/1433 AH and its Executive Regulations, the Real Estate Finance System issued by Royal Decree No. (M/50) dated 13/08/1433 AH and its Executive Regulations, and the Finance Leasing System issued by Royal Decree No. (M/48) dated 13/08/1433 AH and its Executive Regulations, and in continuation of the Bank's Circular No. 341000082695 dated 03/07/1434 AH, which mandates banks operating in the Kingdom wishing to continue engaging in real estate finance and/or finance leasing activities to apply to the Bank for a license to do so or cease those activities, and with reference to the Bank's Circular No. 39100070455 dated 19/06/1439 AH, which covers the procedural requirements for real estate mortgages, please be advised of the following:

First, licensed banks shall continue to engage in real estate finance activities without the need to renew their existing license for such activity or obtain a separate license, provided that they obtain non-objection letters from the Bank regarding the launch of related financing products in accordance with the provisions of relevant systems, regulations, and directives.

Second, licensed banks shall continue to engage in finance leasing activities until the Bank issues specific directives on this matter, provided that they obtain non-objection letters from the Bank regarding the launch of related financing products in accordance with the provisions of relevant systems, regulations, and directives.

For your information and compliance.

Yours sincerely,

Ahmed bin Abdulrahman Al-Khalifa
Governor

Distribution Scope:
Banks operating in the Kingdom

P.O. Box 2992, Riyadh 11169, Tel: 4662300 - Fax: 4662543