law of saudi credit and savings bank

8/9/2019 Law of Saudi Credit and Savings Bank

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Law ofSaudi Credit and Savings Bank

Royal Decree No. M/34

1Jumada II 1427 / 27 June 2006

Article (1):

The following terms and phrases, wherever mentioned in this Law,shall have the meanings given next to them, unless the contextrequires otherwise:

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(1) Bank: Saudi Credit and Savings Bank.

(2) Minister: Minister of Finance.

(3) Board: Banks Board of Directors.

Article (2):

The Bank shall be of a corporate person and shall have an

independent financial status giving it the right to ownership,

disposition and litigation in accordance with the provisions of this

Law.

Article (3):

The Banks headquarters shall be in the City of Riyadh. Branches

may be established in other provinces of the Kingdom, and agents or

correspondents may be appointed in such provinces.

Article (4):

The Bank shall aim at the following:(a) Providing interest-free loans to small and infant enterprises

as well as to Saudi craftsmen and tradesmen to encourage

them to run their own businesses and trades.

(b) Providing interest-free loans for social purposes to low-

income citizens to help them overcome their financial

difficulties.

(c) Assuming a complementing coordinating role in support of

small and infant enterprises.

(d) Promoting savings and thrift by individuals and institutions in

the Kingdom and creating instruments for achieving this

purpose.

Article (5):

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Without prejudice to its Law and the provisions ofShariah, the

Bank shall be monitored by the Saudi Arabian Monetary Agency and

shall be subject to the banking laws.

Article (6):

The Banks authorized capital shall be six thousand million riyals to

be paid by the Ministry of Finance. The capital may be increased

pursuant to a resolution by the Council of Ministers upon a

recommendation by the Minister.

Article (7):

The Bank funds and financing sources shall consist of the

following:

(a)The Banks capital.

(b)Government deposits.

(c)Fees for expenses incurred by the Bank in performing its

functions as determined by its Board of Directors. Loans for

social purposes to low-income individuals shall be exempted

from such fees.

(d)Income resulting from investing Banks funds, balances and

assets.

(e)Allocations or funds granted or loaned to the Bank by the

Government.

(f) Loans and deposits provided by the Saudi Arabian Monetary

Agency and other public and private institutions and charities.(g)Deposits made by the public and guaranteed by the

Government.

(h)Savings bonds.

(i) Securities and collaterals of various types.

(j) Funds or allocations offered by others as a gift or endowment.

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Article (8):

(a) The Bank shall have a Board of Directors of ten members

including the Chairman, as follows:

- Chairman of the Board of Directors- to be nominated

by the Minister: Chairman- Director-General of the Bank: Member

- Representative of the Ministry of Finance: Member

- Representative of the Ministry of Labor: Member

- Representative of the Ministry of Commerce and

Industry: Member

- Representative of the Ministry of Social Affairs:

Member

-Representative of the General Organization for

Technical Education and Vocational Training: Member

- Representative of the Saudi Arabian Monetary Agency:

Member

- Two competent and experienced members from the

private sector to be nominated by the Minister of

Finance

Representatives of government bodies shall be of ranks not

less than (Grade 12).

(b) A resolution forming the Board of Directors shall be issued

by the Council of Ministers for a term of three years renewable

once. The Banks Director-General shall be exempted from the

time limitation.

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(c) The Board shall choose from its members a deputy

chairman at the beginning of each term to act on behalf of the

Chairman in his absence.

(d) Remunerations of the Chairman and Board members shall

be determined by a resolution of the Council of Ministers upon a

recommendation by the Minister.

Article (9):

The Board of Directors is the supreme authority overseeing the

Banks activities and the achievement of its goals. Particularly, it

shall:

(a) approve the organizational structure, and the financial and

administrative regulations.

(b) form the necessary executive committees for the Banks

operation and determine their powers.

(c) approve the Banks draft annual budget for its activities

and administrative expenditures.

(d) set ceilings for the amounts of the types of loans to be

extended by the Bank and set collaterals for repayment.

(e) accept government guaranteed deposits.

(f) open deposit and current accounts with banks in the

Kingdom.

(g) set rules for issuing savings bonds and checks.

(h) set rules for owning real estates and other movable assets,

various types of shares and bonds, and rules for selling,

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trading in, dealing in, pledging and disposing of the same in

a manner serving the Banks interests.

(i) approve programs to encourage citizens and individually

owned establishments and companies to deposit their

savings in the Bank for investment in projects which serve

the objectives of the Bank, with a guarantee that such

savings be paid back on demand.

(j) approve the Implementing Regulations of this Law.

(k) appoint one or more auditors for the Bank.

(l) Approve the closing account and the annual report on the

Banks activities and submit the same to the Council of

Ministers for endorsement.

Article (10):

The Board of Directors shall convene at the request of its Chairman

at least four times a year. To meet required quorum, the Boards

meetings shall not be valid unless attended by two thirds of the Board

members, including the Chairman. The Board shall issue its decisionsby majority vote of attending members. In the event of a tie, the

Chairman shall have the casting vote.

Article (11):

The Bank shall have a Director-General whose rank is not less than

(Grade 15). He shall be appointed pursuant to a resolution by the

Council of Ministers upon a recommendation by the Minister.

Article (12):

The Banks Director-General shall have the following powers:

(a)Achieve the Banks objectives.

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(b)Oversee the Banks management and implement the

policies and decisions adopted by the Board of Directors.

(c) Represent the Bank before third parties.

(d)Collect receivables due to the Bank or transferred thereto.

(e)Prepare quarterly and annual reports to be submitted to

the Board of Directors, including accomplishments and

obstacles, and propose appropriate solutions.

Article (13):

Loans specified in Article (4) of this Law shall be extended against

acceptable and sufficient collaterals to have the loan repaid in

accordance with the provisions of this Law and its Implementing

Regulations.

Article (14):

(a) Loans extended by the Bank shall enjoy the privileges and

guarantees given to Public Treasury rights.

(b) The Banks rights shall be treated in accordance with therules regulating the collection of public money.

(c) All government bodies shall cooperate with the Bank to

facilitate the collection of its loans.

Article (15):

The Banks loans shall be extended in accordance with the

regulations and instructions defining the terms, collaterals and

conditions under which loans are extended. Such instructions shall

include the following:

(a) The borrower has a real need for the loan.

(b) The loan will serve a social, occupational or economic

purpose.

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Article (16):

The Banks fiscal year shall be the same as the States fiscal year.

Article (17):

This Law shall supersede the Law of the Saudi Credit Bank issued

pursuant to Royal Decree No. (M/44) dated 21/9/1391H., and shall

repeal any provisions not consistent therewith.

Article (18):

This Law shall be published in the Official Gazette and shall come

into force ninety days from its publication date.

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law of saudi credit and savings bank

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