These regulations apply to banks, financial institutions, and real estate financing companies operating in the Kingdom when acquiring Real Estate located within the boundaries of the cities of Mecca and Medina. The institution is the supervisory authority authorized to implement these regulations and take necessary actions as it deems appropriate regarding any violation of these regulations, including imposing penalties in accordance with the applicable provisions under the Banking Control Law issued by Royal Decree No. M/5 dated 22/02/1386 AH, and the Rules for Implementing the Provisions of the Banking Control Law issued by Ministerial Decision No. 3/2149 dated 14/10/1406 AH, the Real Estate Financing Law issued by Royal Decree No. M/50 dated 13/08/1433 AH, the Law on the Control of Financing Companies issued by Royal Decree No. M/51 dated 13/08/1433 AH, and its executive regulations issued by the decision of the Governor of the Bank No. 2/M Sh T dated 14/04/1421 AH, the Law of Real Estate Ownership and Investment by Non-Saudis issued by Royal Decree No. M/15 dated 17/04/1421 AH, and the Council of Ministers Decision No. (494) dated 14/09/1429 AH, which includes approval to amend Article Five of the Law of Real Estate Ownership and Investment by Non-Saudis.

The terms and phrases mentioned hereinafter in these regulations shall have the meanings specified next to each of them, unless the context requires otherwise.

• Regulations: Regulations governing the ownership of Real Estate by banks and Real Estate financing companies located within the cities of Mecca and Medina.

• Bank: Saudi Central Bank.

• Banks: Banks and financial institutions operating in the Kingdom. 

• Real Estate financing companies: Joint-stock companies licensed to engage in Real Estate financing activities.

• Non-Saudi: A Natural Personality who does not hold Saudi Arabian nationality, or a non-Saudi company, or a Saudi company established or participated in its establishment or owned by any Natural Personality or legal entity that does not hold Saudi nationality.

2- Without prejudice to the relevant regulations, the ownership of banks and real estate financing companies of properties located in the cities of Mecca and Medina for the purpose of financing them for beneficiaries, or for the ownership of their headquarters, or the headquarters of their branches, or as necessary for the exercise of their activities.

3- Without prejudice to the provisions of the Law of Real Estate Ownership and Investment by Non-Saudis, the financing referred to in paragraph (2) of these regulations is limited to natural or legal persons who hold Saudi nationality only, in accordance with the regulations in force in this regard, which are established and approved by the competent authorities.

4- Banks and real estate financing companies are prohibited from selling properties they own in the cities of Mecca and Medina for the purpose of benefiting from them as (establishing branches / housing for their employees) to non-Saudis.

5- Banks and real estate financing companies are prohibited from selling properties that are owned by them in the cities of Mecca and Medina as a result of customer defaults in payment or their unwillingness to own at the end of the contract, in the case where the real estate financing contract is in the form of leasing, to non-Saudis.

6- Banks and real estate financing companies must conduct the necessary due diligence to ensure that the actual beneficiary of the real estate financing in the cities of Mecca and Medina is of Saudi nationality, regarding the properties owned by the bank or the real estate financing company related to existing financing contracts. 

7- Banks and real estate financing companies must limit real estate financing contracts for individuals to the standard forms of real estate financing contracts as issued by the institution in this regard. 

8- Banks and real estate financing companies must notify the institution in a timely manner before acquiring or selling properties located in the cities of Mecca and Medina, and provide sufficient information about the property and the buyer.

9- Banks and real estate financing companies must provide the institution with quarterly reports that include cases of (ownership / sale / transfer) of properties located in the cities of Mecca and Medina.

10- Banks and real estate financing companies are required to apply what is stated in these regulations, in addition to complying with all relevant systems, regulations, rules, controls, and instructions issued by the competent authorities. 

11- Banks and real estate financing companies must adhere to the mandatory instructions when providing the real estate financing product to individuals, as stated in Circular No. 99/46544 dated 2/9/1439 AH.

12- Banks and real estate financing companies must comply with the institution's Circular No. 381000074831 dated 14/7/1438 AH regarding the definition of commercial real estate financing.

13- These regulations shall come into effect from the date of their issuance.