The Importance of Adhering to Regulations Related to the Commercial Environment and Credit Transactions

No: 42016471

Date(g): 1/11/2020 | Date(h): 16/3/1442

Status: In-Force

Effective from 2020-11-01 - Oct 31 2020
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Referring to the Registered Mortgage Law issued by Royal Decree No. (M/49) dated 13/08/1433 AH, the Bankruptcy Law issued by Royal Decree No. (M/50) dated 28/05/1439 AH, the Commercial Mortgage Law issued by Royal Decree No. (M/86) dated 08/08/1439 AH, and the Law on the Assurance of Rights in Movable Property issued by Royal Decree No. (M/94) dated 15/08/1441 AH and their executive regulations.

Given the importance of these laws in preserving and stabilizing the commercial environment in the Kingdom, the connection of many credit transactions to their provisions, the importance of compliance with these laws, and the aim of achieving financial stability and protecting transactions; the Central Bank would like to emphasize to all financing entities the following:

1.	Inclusion of credit risk assessments for the risks associated with the initiation of bankruptcy proceedings, and verification of the existence and adequacy of procedures and mechanisms in this regard.
2.	Ensure that transactions related to mortgages and guarantees comply with the provisions of the laws mentioned above, as well as other relevant laws.