1. 1. The words and phrases contained in these instructions shall have the meanings specified next to each of them in Article (1) of the Bankruptcy Law, issued by Royal Decree No. (M/50) dated 28/05/1439 AH, and Article (1) of its Implementing Regulation, issued by Council of Ministers Resolution No. (622) dated 24/12/1439 AH.

1. 2. The following words and phrases - wherever they appear in these instructions - shall have the meanings specified next to each of them, unless the context requires otherwise:

• Central Bank: Saudi Central Bank.

• Law: Bankruptcy Law.

• Regulation: Implementing Regulation of the Bankruptcy Law.

• Competent Court: The court where the bankruptcy proceedings are filed.

• Committee: Bankruptcy Committee.

2. 1. The purpose of these instructions is to clarify the obligations of banks and financial institutions in accordance with the provisions of the Law and Regulation, in addition to facilitating banking transactions related to bankruptcy procedures.

2. 2. These instructions do not violate the provisions contained in the Law and Regulation, in addition to other relevant regulations and instructions, including - but not limited to - the following:

• ● Rules and Guidelines for Managing Potentially Distressed Loans, communicated under Central Bank Circular No. (41033343) dated 11/05/1441 AH

• ● Rules for Bank Accounts, communicated under Central Bank Circular No. (67/65681) dated 01/11/1440 AH.

• ● Regulations governing bankruptcy proceedings in commercial courts, issued by Minister of Justice Decision No. (6421) dated 21/03/1441 AH.

• ● Central Bank Circular No. (42025830) dated 21/04/1442 AH, regarding the confirmation of not refraining from confiscating the bank guarantee letter due to the initiation of any bankruptcy procedures and suspending claims against the client who issued the letter.

• ● Central Bank Circular No. (42016471) dated 16/03/1442 AH, regarding the importance of considering regulations related to the business environment and credit transactions.

3. 1. Enabling the Trustee or the Committee - as applicable - to access any information or procedures related to the transactions of the Debtor subject to the financial reorganization process, or the liquidation process, or the financial reorganization process for small Debtors, or the liquidation process for small Debtors, or the administrative liquidation process, through various channels, in accordance with the provisions of Chapter Three of these instructions.

3. 2. Adhering to the suspension of claims against the Debtor immediately upon the bank receiving proof of the issuance of a decision by the competent Court to suspend claims, through official notification means, or the Trustee, or the Debtor - as applicable - including orders for deduction and transfer from bank accounts based on the rulings and decisions issued by the competent Courts after the suspension of claims, with consideration of the following:

• ● Commitment to suspend claims according to the specified periods for each procedure in the Law, or until the bank receives evidence of the cancellation of the suspension of claims, taking into account any extensions that may occur based on the ruling of the competent Court.

• ● The effect of the suspension of claims shall not extend to orders for seizure and deduction from bank accounts and the prohibition of transactions based on rulings and decisions issued prior to the suspension of claims, unless a decision is issued by the competent Court to the contrary.

• ● Not violating the relevant legal provisions regarding the enforcement on guarantees during the period of suspension of claims.

3. 3. Complying with the submission of the bank's claims to the Trustee or the Committee - as applicable - within the specified timeframe for submission, clarifying their nature and attaching supporting documents.

3. 4. Verifying the powers and duties of the Trustee, and each Trustee individually if there are multiple Trustees, based on the ruling of the competent Court.

3. 5. Ensuring that the staff of the relevant departments and branches are familiar with these instructions.

4. 1. A bank account shall be opened for the debtor subject to one of the Bankruptcy procedures stipulated in paragraph (3,1) according to the following requirements:

• 1. A request submitted by the Trustee or the Committee - as applicable - to open the account, specifying the purpose.

• A decision from the competent Court including any of the following:

  • أ. Opening a liquidation procedure or liquidation for small debtors for a natural or legal person and appointing one Trustee.

  • ب. Opening a liquidation procedure or liquidation for small debtors and appointing more than one Trustee, specifying the tasks and powers of the Trustee, including opening and managing bank accounts.

  • ج. Opening an administrative liquidation procedure and appointing the Bankruptcy Committee to manage the procedure.

  • د. Restricting the debtor and assigning the Trustee to manage the activity in the financial reorganization procedure.

• 3. A copy of the national identity of the Trustee, or a letter from the Committee containing the details of the authorized person to manage the account in the administrative liquidation procedure, along with a copy of their national identity.

• 4. A copy of the commercial register and the articles of incorporation and its attachments for the legal person subject to the Bankruptcy procedure, or the national identity/residence for the natural person.

4. 2. The Trustee or the Committee may continue to manage the accounts of the debtor subject to one of the Bankruptcy procedures stipulated in paragraph (1, 3) according to the following requirements:

• 1. A decision from the competent Court including any of the following:

  • أ. Opening a liquidation procedure or liquidation for small debtors for a natural or legal person and appointing one Trustee.

  • ب. Opening a liquidation procedure or liquidation for small debtors and appointing more than one Trustee, specifying the tasks and powers of the Trustee, including managing bank accounts.

  • ج. Opening an administrative liquidation procedure and appointing the Bankruptcy Committee to manage the procedure.

  • د. Restricting the debtor and assigning the Trustee to manage the activity in the financial reorganization procedure.

• 2. A copy of the national identity of the Trustee, or a letter from the Committee containing the details of the authorized person to manage the account in the administrative liquidation procedure along with a copy of their national identity.

4. 3 A bank account shall be opened for the purpose of depositing the proceeds from the sale of the bankruptcy assets securing the debt of the debtor subject to the financial reorganization procedure or financial reorganization for small debtors, according to the following requirements:

• 1. A request submitted by the Trustee to open the account, specifying the purpose and the validity period of the account, which shall not exceed the date of issuance of the competent Court's ruling to terminate the procedure.

• 2. A decision from the competent Court including the opening of a financial reorganization procedure or financial reorganization for small debtors for a natural or legal person and appointing the Trustee.

• 3. A copy of the national identity of the Trustee.

• 4. The Trustee's acknowledgment to notify the bank immediately upon the issuance of the competent Court's decision regarding their resignation or acceptance of the resignation request, allowing the new Trustee to continue managing the account, after the competent Court has appointed the new Trustee in place of the current Trustee, along with a copy of their national identity.

5.1. The Trustee or the Committee - as applicable - shall be provided with the bank account statements of the Debtor subject to one of the Bankruptcy Procedures stipulated in paragraph (1, 3) after fulfilling the decision of the Competent Court which includes any of the following:

• أ. Opening the liquidation procedure or liquidation for small Debtors for a natural or legal person and appointing one Trustee.

• ب. Opening the liquidation procedure or liquidation for small Debtors and appointing more than one Trustee while specifying the tasks and powers of the Trustee, including requesting bank account statements.

• ج. Opening the administrative liquidation procedure and appointing the Bankruptcy Committee to manage the procedure.

• د. Restricting the Debtor's actions and assigning the Trustee to manage the activity in the financial reorganization procedure.