Law of

Saudi Credit and Savings Bank

Royal Decree No. M/34

Jumada II 1427 / 27 June 2006 1

Article (1):
The following terms and phrases, wherever mentioned in this Law,
shall have the meanings given next to them, unless the context
requires otherwise:

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 (1) Bank: Saudi Credit and Savings Bank.
(2) Minister: Minister of Finance.
(3) Board: Bank’s 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 Bank’s 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 of Shari’ah, the
Bank shall be monitored by the Saudi Arabian Monetary Agency and
shall be subject to the banking laws.

Article (6):

The Bank’s 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 Bank’s 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 Bank’s 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 Bank’s 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
Bank’s 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 Bank’s
operation and determine their powers.
(c) approve the Bank’s 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 Bank’s 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
Bank’s 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 Board’s
meetings shall not be valid unless attended by two thirds of the Board
members, including the Chairman. The Board shall issue its decisions
by 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 Bank’s Director-General shall have the following powers:
(a) Achieve the Bank’s objectives.

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 (b)Oversee the Bank’s 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 Bank’s rights shall be treated in accordance with the
rules 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 Bank’s 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 Bank’s fiscal year shall be the same as the State’s 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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