Document background
A Simple Interest Promissory Note is commonly used in Saudi Arabia for both commercial and personal lending arrangements where one party promises to pay a specific sum of money to another party with interest. This document must be carefully structured to comply with both Saudi Arabian law and Shariah principles, particularly regarding the treatment of interest (riba). The note typically includes the principal amount, interest rate expressed in Shariah-compliant terms, payment schedule, and maturity date. It is used in various scenarios such as business loans, personal lending, and commercial transactions where deferred payment is required. The document's enforceability is governed by Saudi Arabian Commercial Papers Regulation and must conform to SAMA (Saudi Arabian Monetary Authority) guidelines. It serves as a legally binding instrument that can be used in Saudi courts for enforcement purposes while maintaining compliance with Islamic financial principles.
