Banking Control Law

A bank may not: 1. engage in wholesale or retail, including import or export, for its benefit or for a commission; 2. have a direct interest, as a shareholder, partner, owner, or in any other capacity, in any commercial, industrial, agricultural enterprise, or any other enterprise, except within the limits specified in paragraph (4) of this Article. Interest which results from the satisfaction of debts due to the bank by a third party shall be excluded from this provision, provided that the bank disposes of such interest within a period of two years or within a longer period determined in agreement with SAMA; 3. purchase the stocks and shares of any bank operating in the Kingdom without SAMA’s approval; 4. own the stocks of any other joint stock company incorporated in the Kingdom whose value exceeds 10% of its paid up capital, provided that the nominal value of such stocks does not exceed 20% of the bank’s paid-up capital and reserves; SAMA may raise such percentages when necessary; and 5. own or lease a real property, unless it is required for its banking business, staff's housing or recreation, or the satisfaction of a debt due to the bank by a third party. If the bank acquires real property in satisfaction of debts due thereto by a third party and such property is not necessary for its banking business or for the housing or recreation of its staff, the bank shall liquidate such property within three years from the date of acquisition or, in exceptional circumstances, within Banking Control Law the period(s) approved by SAMA and under its conditions. If, prior to the effective date of this Law, a bank acquired real property in a manner contrary to the provision of this paragraph, it shall gradually liquidate such property within seven years or, in exceptional circumstances, within the period(s) approved by SAMA and under its conditions. Notwithstanding the provisions of paragraph (5) of this Article, the bank may, in special circumstances and with the approval of SAMA, acquire real property whose value does not exceed 20% of its paid-up capital and reserves.