The Saudi Central Bank, previously called the Saudi Arabian Monetary Authority, has issued new directives to financing companies in the Kingdom, official sources revealed to Asharq Al-Awsat.
Based on Sharia governance, the ordered measures seek to establish a minimum level of practices that improve Saudi Arabia’s financing scene compatibility with Islamic provisions and principles.
According to the information obtained by Asharq Al-Awsat, the instructions include defining the roles and responsibilities of the board of directors, the Sharia committee, and senior management.
They also cover principles of independence and confidentiality.
Through the new measures, the Saudi Central Bank has shown a strong desire for strengthening and developing Islamic Finance in relevant companies.
Moreover, recent instructions compel finance companies to disclose the resumes of all board members on the company’s website to ensure that stakeholders can judge their efficiency and ability to carry out assigned tasks effectively.
Senior management’s responsibilities include identifying legal matters and referring them to the Central Bank’s specialized committee for a final decision.
The Central Bank will provide necessary legal aid and disclosures. Its committee will follow up on the implementation of decisions as well.
Education and training programs will be offered for main internal stakeholders, including the board, the committee and employees.
As for Islamic Finance supervision, the new instructions show that Sharia compliance can cover regular evaluation of financing activities carried out by designated companies.
Regulatory assessment will ensure the compliance of financing companies with the provisions and principles of Islamic Finance laws.
A competent third party can be hired to carry out these tasks after notifying the Central Bank.