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  • Chapter 5: Supervision*

    * This title has been amended from "Supervising Finance Companies" to "Supervision", in accordance with the Royal Decree No. (M/272) dated 04/12/1445H, corresponding to 10/06/2024G.

    • Article 22

      The Regulations shall regulate the following: 
       
       1.The maximum limit of finance that may be offered by a finance company.
       
       2.Prohibiting or restricting finance companies from conducting certain credit transactions.
       
       3.The special conditions to be observed by a finance company in conducting certain credit activities.
       
       4.The minimum percentage of collateral proportions to be observed in certain contracts for finance amounts and assets presented as collateral thereof.
       
       5.The principles for disclosure of the criteria of the cost of finance and the method of calculation to enable consumers to compare prices.
       
       6.Controls necessary to ensure equity of transactions and protection of consumers’ rights.
       
       7.Principles of fair distribution of finance profit over maturity period.
       
       8.Collaterals for protecting payments made by borrowers and how the finance company disposes of the same.
       
       9.Debts collection by finance companies and provisions of licensing.
       
       10.Any other matters regulated by the Regulations in accordance with this Law.
       

    • Article 23

      The finance company must comply with the rules of capital adequacy ratio as specified by the Regulations.

    • Article 24

      The finance company shall diversify its business risks, and may not finance a single company or a group of companies with connected ownership in excess of the percentage specified by the Regulations.

    • Article 25

      Subject to prevailing laws, SAMA's approval must be obtained for the amendment of the capital of the finance company or amendment of its articles of association as well as merger and acquisition.

    • Article 26

      The finance company shall obtain SAMA's approval for opening or closing a branch, an agency or an office within the Kingdom or abroad.

    • Article 27

      The finance company shall appoint one or more licensed external auditor. SAMA may appoint another auditor at the expense of the finance company in the cases specified by the Regulations.

    • Article 28

      The finance company shall provide SAMA with any information requested. SAMA shall inspect the records and accounts of the finance company periodically. The finance company shall be deemed in violation of the provisions of this Law and its Regulations if it fails to provide information required for such inspection.

    • Article 29

      This article has been amended in accordance with the Royal Decree No. (M/272) dated 04/12/1445H, corresponding to 10/06/2024G. Please refer to the Arabic version of this article to read the last updated version.
      If a finance company commits violations relating to any professional irregularities or transactions exposing its shareholders or creditors to risk, or if its debts exceed its assets, SAMA shall, by written decision and in proportion to the violation, take one or more of the following measures: 
       
       1.Serve a warning.
       
       2.Require the finance company to submit an appropriate corrective action plan.
       
       3.Order the suspension of some of its operations or prevent distribution of dividends.
       
       4.Impose the fine set out in Article 34 of this Law, as the case may be.
       
       5.Order the temporary suspension or dismissal of the violator, if not a board member, according to the gravity of the violation.
       
       6.Temporary suspension of the chairman or a board member.
       
       7.Appoint one or more consultants at the expense of the finance company to provide advice on its conduct of business.
       
       8.Suspend the board of directors and appoint a manager at the expense of the finance company to run the company until the causes for suspension, as determined by SAMA, cease to exist.
       
      If SAMA deems that the violation calls for cancellation of the license or liquidation of the finance company, SAMA may initiate a suit before the competent court. SAMA, at its own discretion, may suspend the license until the suit is decided. 
       

    • Article 30

      Any aggrieved party may appeal the decisions of SAMA before the competent court within 60 days from the date of being aware of such decision.