Regulatory Alerts2023-11-14
Added · Updated
Risk Management Framework for Shari’ah Compliant Banking
The Saudi Central Bank (SAMA) issued the Risk Management Framework for Shari’ah Compliant Banking to establish minimum principles for managing credit, market, operational, liquidity, and equity investment risks in Islamic banking. This framework supersedes previous circulars and mandates that domestic banks implement comprehensive risk oversight, independent governance structures, and robust identification and measurement methodologies for Shari’ah-specific risks. Banks are required to ensure strict compliance with Shari’ah rules, maintain adequate capital and liquidity buffers, and report effectively to the Board and Senior Management starting from March 3, 2024.
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