SAMA Announces the Commencement of Compulsory and Full Implementation of Finance Laws and Regulations

The Saudi Arabian Monetary Agency (SAMA) announced the commencement of compulsory and full implementation of the Finance Companies Control Law starting Sunday 16/1/1436H (9/11/2014).

H.E. Dr. Fahad Al-Mubarak, Governor of SAMA, stated that the full implementation of finance laws and regulations would have positive effects on the protection of consumers by promoting transparency and disclosure and creating a competitive market that provides more services with a higher quality at competitive prices, serving the interests of citizens and meeting market needs. The finance laws and regulations are also expected to enhance the strength and stability of the finance sector.

The Governor urged citizens and expatriates seeking financing to deal only with licensed banks and finance companies. He added that SAMA had approved 37 licensing applications for various finance activities, of which real estate finance licenses have been issued to 12 banks and 4 finance companies, in addition to other 7 licenses issued to finance companies for carrying out finance activities other than real estate finance. Moreover, 14 companies have been granted preliminary approvals for licensing various finance activities and those companies are currently completing the requirements of the Ministry of Commerce and Industry in compliance with the finance laws and regulations.

The commencement of compulsory and full implementation of finance laws and regulations comes after the lapse of the grace period, set forth in Article 36 of the Finance Companies Control Law issued by Royal Decree No. (M/51) dated 13/8/1433H, stating that "Companies and establishments engaging in finance activities in the Kingdom, prior to the entry into force of this Law, shall be granted a grace period of two years to comply with the provisions of this Law�. The last day of the above-mentioned grace period was Saturday 15/1/1436H (8/11/2014).

SAMA emphasized that banks and finance companies shall fully comply with the provisions of the finance laws, their implementing regulations, and rules and directives issued by SAMA, and urged companies that obtained preliminary approvals to complete the requirements of the Ministry of Commerce and Industry during the periods specified within their preliminary approvals. SAMA also stressed that it would not hesitate to take actions against those who violate the laws and directives.

SAMA encouraged the public to visit its website to learn about licensed finance entities, the finance laws and their implementing regulations, as well as answers to frequently asked questions on this subject.