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Article One: Introduction

No: 42071901 Date(g): 26/5/2021 | Date(h): 15/10/1442 Status: In-Force

Translated Document

  1. SAMA has issued these instructions based on the powers vested to it under the Finance Companies Control Law, issued by Royal Decree No. (M/51) dated 13/8/1433 H, and its Implementing Regulations issued by the decision of the Governor No. (2/BSI) dated 14/4/1434 H.
  2. The commitment of finance companies to conduct their financing activities in compliance with Islamic Shariah is one of the requirements of the Finance Companies Control Law, Article (3) of the Finance Companies Control Law, issued by Royal Decree No. (M/51) dated 31/8/1433 H, states that "Finance companies – licensed pursuant to this Law-shall engage in finance activities in a manner not conflicting with principles of Sharia as defined by Sharia committees, whose members are selected by these companies, without prejudice to the integrity of the financial system and equity of transactions."
  3. These instructions aim to strengthen the role of Shariah committees in finance companies supervised by SAMA and ensure that financing activities align with the rules and principles of Shariah. To achieve this, it is expected that the Board of Directors and senior management of finance companies have a reasonable understanding of Shariah principles and their broad application in Islamic finance. It is also expected that the Shariah committee has sufficient knowledge of financial matters in general, and Islamic finance in particular, to enable them to understand the Shariah issues presented to them.