Document background
The Line of Credit Promissory Note is a crucial document in Saudi Arabian banking practice, used when a financial institution extends a revolving credit facility to a borrower. This document type combines the legal enforceability of a promissory note with the flexibility of a line of credit, all while ensuring compliance with Islamic banking principles and Saudi Arabian law. It is commonly used for business financing, working capital needs, and ongoing credit requirements where the borrower needs flexibility in drawing funds up to a pre-approved limit. The document must carefully balance Sharia compliance requirements with practical banking needs, incorporating profit calculations instead of conventional interest, and including specific provisions required by Saudi Arabian banking regulations and SAMA guidelines.
