Al Rajhi Bank has launched the financing product for local commodities in the Kingdom through a platform for its clients in the corporate sector, provided by Al-Nafais International Company, in a step that supports the national transformation programs and is in line with the Kingdom’s 2030 vision aimed at developing Islamic finance.
The product meets the customers’ desire to provide local goods, which adds value to existing local products, and is in line with the Saudi Central Bank’s direction to localize products and increase the local content contained in the Financial Sector Development Document, which is one of the programs of Vision 2030.
The product allows the customer to sell directly through the platform system or authorize the bank to sell in their behalf. It is expected to contribute to the organization and development of work mechanisms in the local commodity market, minimizing risks and reservations of random Tawarruq operations, which increases performance efficiency and provides protection for the transacting parties.
The local commodity trading platform is characterized by several advantages, the most important of which is the completion of operations through a clearing unit independent of the seller and buyer and has direct authority over the goods, and the presence of an independent monitoring body to ensure the actual existence of goods and the safety of operations, and to prove the real ownership of goods by issuing documents legitimizing the clearing unit as an independent entity.
The platform is committed to the concept of an open market, ensuring that there are no formalities. The product is based on a new and innovative concept, which is the transfer of goods traded in bank Murabaha operations to the open market and not to be closed between intermediaries, but to be a real market that supports the economy and achieves legitimacy in its dealings while eliminating the risks of price fluctuations, adopting the concept of a market maker that purchases goods when there is no buyer for them.
Al Rajhi Bank, through the Corporate Banking Group, is keen on developing its corporate banking services to meet their aspirations in line with modern needs, which are constantly evolving and growing at a rapid pace with the help of a distinguished team that seeks to implement the concept of a comprehensive relationship with customers and serve them, in all fields.
© Press Release 2021