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Obtaining a License for Real Estate Financing and Leasing Activities

No: 341000082695 Date(g): 12/5/2013 | Date(h): 3/7/1434

Effective from 2013-08-20 - Aug 19 2013
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Based on the Real Estate Financing System issued by Royal Decree No. 50/M dated 13/8/1434H, and its Executive Regulation issued by Minister of Finance Decision No. 1229 dated 10/4/1434H, the Leasing Financing System issued by Royal Decree No. 48/M dated 13/8/1434H,and its Executive Regulation issued by the Central Bank Governor’s Decision No. M/1 dated 14/4/1434H, the Financing Companies Control System issued by Royal Decree No. 51/M dated 13/8/1433H, and its Executive Regulation issued by the Central Bank Governor’s Decision No. M/2 dated 14/4/1434H, and since Article 99 of the Executive Regulation of the Financing Companies Control System states that "companies and institutions operating in the financing sector in the Kingdom before the system's enforcement must provide the Central Bank within the first nine months of the grace period specified in Article 36 of the system with a plan to regularize their status according to the provisions of the system or a plan to exit the market."

Therefore, all banks operating in the Kingdom that wish to continue engaging in real estate financing and/or leasing activities must apply to the Central Bank for a license to do so or cease such activities entirely starting from 14/10/1434H. Copies of the financing systems, their executive regulations, and licensing application forms and guidelines can be obtained through the following links:

- Financing Systems and Executive Regulations

- Licensing Provisions and Requirements

 

According to Circular No. 22129/67 dated 9/4/1440H, Circular No. 58934/67 dated 24/9/1440H, and in reference to Circular No. 39100070455 dated 19/6/1439H concerning the procedural requirements for mortgage, the Central Bank advises as follows:

 

First:Licensed banks and financial institutions may continue to engage in real estate financing without the need to renew their existing real estate financing license or obtain a separate license. However, they must obtain no-objection letters from the Central Bank for launching related financing products in accordance with the provisions of the relevant systems, regulations, and instructions.
 
Second:Licensed banks and financial institutions may continue to engage in leasing financing until new instructions are issued by the Central Bank in this regard, provided they obtain no-objection letters from the Central Bank for launching related financing products in accordance with the provisions of the relevant systems, regulations, and instructions.