Document background
A Credit Facility Letter is a fundamental document in Saudi Arabian Islamic banking, used when a financial institution offers financing facilities to corporate or institutional clients. It represents the bank's formal offer of Shariah-compliant financing, detailing the type and amount of facility, profit rates, security requirements, and conditions precedent. The document must align with Saudi Arabian banking regulations and Islamic finance principles, making it distinct from conventional lending documents used in other jurisdictions. It serves multiple purposes: as an offer letter, a summary of key terms, and, once accepted, a binding agreement. The letter is typically issued following internal credit approval and Shariah board review, and precedes the execution of detailed facility documentation.
