Based on the authority vested in the Saudi Central Bank pursuant to its governing system issued by Royal Decree No. M/36 dated 11/04/1442 AH, and The Banking Control System issued by Royal Decree No. M/5 dated 22/02/1386 AH  and Central Bank Circular No. 41042498 dated 1441/06/18 AH The amount under it is the Sharia governance framework for local banks and financial institutions operating in the kingdom and Circular No. 43038156 dated 27/04/1443 AH The notified amount constitutes the risk management framework for banks and financial institutions engaged in Islamic banking activities. This represents the first phase of establishing a supervisory framework for banks and financial institutions practicing Islamic banking.

Therefore, the central bank emphasizes that banks and financial institutions offering Sharia-compliant credit products, must obtain approval from the Sharia committee within the bank/institution for all credit-related policies and procedures. This includes all steps from granting credit to the termination of the credit relationship, as well as procedures for early repayment and restructuring/rescheduling, before obtaining approval from the bank's/financial institution's board of directors or their authorized representatives, as applicable.

The Central Bank also emphasizes the necessity of complying with all regulatory requirements for banks and financial institutions that engage in Islamic banking activities, in addition to other regulatory requirements issued by the Central Bank.

For your information and action effective as of June 1, 2022.