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The Loan Confirmation Letter is a crucial document in Saudi Arabian banking practice, issued following the approval of a financing facility. It serves as the official documentation confirming the bank's commitment to provide financing under specified terms, while ensuring compliance with both Saudi banking regulations and Islamic Sharia principles. This document is typically issued after initial loan application approval but before the final disbursement of funds, detailing key terms such as the facility amount, profit rate structure, payment schedule, and any conditions precedent. The letter must incorporate specific elements required by the Saudi Central Bank (SAMA) and confirm the Sharia-compliant nature of the financing structure. It forms part of the broader loan documentation package and may be referenced in subsequent legal proceedings or regulatory reviews.

1. Letter Header and Date: Bank letterhead, reference number, and date of the confirmation letter

2. Recipient Details: Full name and address of the borrower

3. Reference to Facility Agreement: Reference to the master facility agreement or application if applicable

4. Confirmation of Approval: Clear statement confirming the approval of the financing facility

5. Key Financial Terms: Principal amount, profit rate (not interest), payment terms, and tenure of the facility

6. Sharia Structure: Confirmation of the Islamic financing structure being used (e.g., Murabaha, Ijara)

7. Conditions Precedent: List of any remaining conditions that must be satisfied

8. Payment Instructions: Details of how and where payments should be made

9. Regulatory Disclosures: Required disclosures under SAMA regulations and consumer protection laws

10. Contact Information: Relevant contact details for queries or further information

11. Signature Block: Authorized signatory details and space for signature