The Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud—may God preserve him—issued a royal decree establishing regulations to limit the practice of unauthorized financing activities, in accordance with the Law on the Supervision of Finance Companies, to ensure the accurate detection of violators, expedite their prosecution, and impose the penalties prescribed by law; thereby ensuring the protection of the economy and prevent the exploitation of the public’s needs through irregular financing practices.
His Excellency the Minister of Justice and President of the Supreme Judicial Council, Sheikh Dr. Walid bin Muhammad Al-Samaani, praised the contents of the decree issued by the Custodian of the Two Holy Mosques —may God support him—and affirmed that the new regulations will, God willing, curb the practice of financing by those not licensed to engage in such activity, which will help limit the exploitation of Debtors" Default through irregular financing methods, which do not take into account the debtor’s credit status or ability to repay; in addition to imposing heavy burdens on them due to financing that is not subject to the oversight and supervision of the authority responsible for monitoring finance companies; this leads to the debtor’s inability to fulfill their obligations.
His Excellency explained that the royal decree includes an electronic link with the Saudi Arabian Monetary Authority to enforce its provisions and establish the necessary mechanisms and arrangements in partnership between the two entities.
It should be noted that Article 4 of the Financing Companies Supervision Law prohibits the practice of any of the financing activities specified in the law unless a license has been obtained in accordance with the provisions of this law or other applicable regulations, and it is prohibited for any unlicensed person to use—by any means—any indication that they are engaging in the financing activities specified in the regulations or anything that implies such engagement, or to use in their documents, papers, or advertisements, any synonymic term or phrase thereof, as specified in the second paragraph of Article 35 regarding penalties for violations of the regulations.
Related Topics: Real Estate – International Trade – Real Estate Sector – Residential Villas – Licenses – Loans – Housing Projects – Financing
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