Obtaining a license to conduct mortgage financing and leasing activities
| No: 341000082695 | Date(g): 12/5/2013 | Date(h): 3/7/1434 | Status: No longer applicable |
Translated Document
Effective from 2013-08-20 - Aug 19 2013
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Based on the Real Estate Finance Law issued by Royal Decree No. 50/M dated 13/8/1434 AH, and its Executive Regulation issued by Minister of Finance Decision No. 1229 dated 10/4/1434 AH, and The Finance Lease Law issued by Royal Decree No. 48/M dated 13/8/1434 AH,and its Executive Regulation issued by the Central Bank Governor’s Decision No. M/1 dated 14/4/1434 AH, and The Finance Companies Control Law issued by Royal Decree No. 51/M dated 13/8/1433 AH, and Executive Regulation issued by the Central Bank Governor’s Decision No. M/2 dated 14/4/1434 AH, and since Article 99 of the Executive Regulation of the Finance Companies Control Law states that "Companies and establishments engaging in finance activities in the Kingdom of Saudi Arabia prior to the Law’s entry into force must provide SAMA, within the first nine months of the period prescribed in Article (36) of the Law, with their plan to correct their situation according to the Law 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 SAMA for a license to do so or cease such activities entirely starting from 14/10/1434 AH. Copies of the finance Laws, their Executive regulations, and licensing application forms and guidelines can be obtained through the following links:
- Finance Laws and Their Executive Regulations
- Licensing Provisions and Requirements
According to Circular No. 22129/67 dated 9/4/1440 AH, and Circular No. 58934/67 dated 24/9/1440 AH, and in reference to Circular No. 39100070455 dated 19/6/1439 AH concerning the procedural requirements for mortgage, SAMA advises as follows:
| First: | Licensed banks 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 SAMA for launching related financing products in accordance with the provisions of the relevant Laws, regulations, and instructions. |
| Second: | Licensed banks may continue to engage in leasing financing until new instructions are issued by SAMA in this regard, provided they obtain no-objection letters from SAMA for launching related financing products in accordance with the provisions of the relevant Laws, regulations, and instructions. |