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Article One: Introduction

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

Effective from Jan 01 2022 - Dec 31 2021
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  1. The Saudi Central Bank has issued these instructions based on the powers granted to it under the Finance Companies Control Law, issued by Royal Decree No. (M/51) dated 13/8/1433 AH, and its implementing regulations issued by the decision of the Governor No. (2/M S T) dated 14/4/1434 AH.
  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 AH, states that "Companies licensed under this law shall conduct financing activities in compliance with Islamic Shariah principles, based on the decisions of Shariah committees appointed by these companies, without undermining the system's integrity or the fairness of transactions."
  3. These instructions aim to strengthen the role of Shariah committees in finance companies supervised by the Saudi Central Bank 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.