Effective from Jun 11 1966 - Jun 10 1966 To view other versions open the versions tab on the right
No bank shall undertake any of the following activities:
1)
To engage, whether for its own account or on a commission basis, in the wholesale or retail trade including the import or export trade.
2)
To have any direct interest, whether as a stock-holder, partner, owner, or otherwise, in any commercial, industrial, agricultural or other undertaking unless within the limits referred to in paragraph 4 of this Article, except when such interest results from the satisfaction of debts due to the bank, provided that all such interests shall be disposed of within a period of two years or within any such longer period as may be determined in consultation with SAMA.
3)
To purchase, without the approval of SAMA, stocks and shares of any bank conducting its business in the Kingdom.
4)
To own stocks of any other joint-stock company incorporated in the Kingdom, in excess of ten percent of the paid up capital of such a company provided that the nominal value of these shares shall not exceed twenty percent of the bank's paid-up capital and reserves; the above limits may, when necessary, be increased by SAMA.
5)
To acquire or lease real estate except in so far as may be necessary for the purpose of conducting its banking business, housing of its employees or for their recreation or in satisfaction of debts due to the Bank.
In cases where a bank acquires real estate in satisfaction of debts due to it and such real estate is not necessary for the Bank's own banking business or housing of its employees or for their recreation, it shall liquidate such real estate within three years of its acquisition or within the period or periods approved by SAMA and under the conditions as it may determine where exceptional circumstances are justified.
If, prior to this Law becoming effective, a bank acquired real estate in a way contrary to the provisions of this paragraph, it shall gradually liquidate such real estate within seven years or within the period or periods approved by SAMA and under the conditions as it may determine where exceptional circumstances are justified.
As an exception to the provisions of paragraph 5 of this Article, the bank may, in special and justifiable circumstances and with the approval of SAMA, acquire real estate, the value of which shall not exceed 20 percent of its paid-up capital and reserves.
