July 2, 2012 / 2:38 PM / 5 years ago

Saudi Arabia approves long-awaited mortgage law - state news agency

DUBAI, July 2 (Reuters) - Saudi Arabia has approved a draft law that will allow mortgages to be sold in the kingdom, a long-awaited move to provide finance for real estate projects, the state news agency said on Monday.

“After reviewing a report by the minister of finance, the cabinet has approved the draft mortgage law and a royal decree has been prepared,” a statement to the Saudi Press Agency said.

The law has been mooted for years but has been held up due to considerations around providing mortgage finance in an Islamic sharia-compliant manner and how to deal with sensitive issues such as letting banks take away a borrower’s home if there is a default.

Reporting by Asma Alsharif and Amena Bakr; Writing by David French; Editing by Sami Aboudi

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