SAMA Governor�s Statement
On the Occasion of the Issuance of the Council of Ministers� Resolution Approving the Finance Laws
SAMA Governor Dr. Fahad Al-Mubarak expressed his thanks and appreciation to the Custodian of the Two Holy Mosques and HRH the Crown Prince for the issuance of these significant and essential laws in respect of the financing sector of the Saudi economy. Al-Mubarak also expressed his pride over the high trust with which SAMA is honored with the privilege to supervise the real estate financing sector and non-banking financial companies.
The governor pointed out that, according to the new laws, there will be two primary finance sectors. The first is the real estate financing sector; the other is the non-banking financial sector which will complement the banking sector and support competitiveness in the credit market. SAMA is working on developing the implementation regulations for these two sectors, in pursuance of the powers assigned to it under these laws.
In regard to the real estate finance, he added that SAMA has developed a detailed vision through a number of regulations, most notably the Implementation Regulation of the Real Estate Finance Law, which establishes detailed provisions for the law including, for example, work mechanisms, consumer rights, and mechanisms to support beneficiaries of real estate finance, in addition to the refinance regulation through mortgage backed securities, which gives the real estate financiers direct access to capital markets for refinancing, thereby reducing the cost of finance for the consumer. These securities will provide a new investment tool on the Saudi Capital Market.
As for the supervision of non-bank financial companies, the governor stated that SAMA is embarking on preparing regulations commensurate with the status of the non-banking financial sector to achieve the cherished objectives of the Finance Companies Control Law in terms of creating a new competitive sector for credit provision taking into account the principles of transparency, discipline and consumer protection.
In respect to the Implementing Regulation of the Financial Leasing Law, the governor confirmed that it will include substantial additions to this type of service in the domestic market to address the existing weaknesses including, in particular, the provisions governing the rights of the lessee and the lessor in a fair manner ensuring stability and sustainability, thereby reducing risk and this will be reflected on pricing and the service for beneficiaries.
Finally, Al-Mubarak said that SAMA will post on its website the entire contents of these regulations to receive the views of stakeholders and beneficiaries thereof in preparation for their issuance after coordinating with relevant government agencies.