Islamic Economy in Saudi Arabian Companies Essay -- Economics

1. Saudi Companies Fund A. The institution of SAMA could not be a profit-making institution, it had to conform to Islamic law. SAMA has from time to time financed one-half of government debt. From 1962 to 1983, the governments earning grew in surplus, and all the debt was repaid. Whenever the government needed SAMA bolstered government reserves. B. In 1966 a major banking control law clarified and strengthened SAMA's role in regulating the banking system. Foreign banks submitted application for license. SAMA sent its recommendation to the ministry of finance. The ministry set conditions for granting licenses to foreign banks. C. Saudi companies introduced a great deal of regulation abiding with Sharia law. This law also defined requirements against deposits. There were several restriction to abide by SAMA's implementation of monetary policy. 2. The Saudi financial system A. The Saudi financial system had three autonomous government institutions. They were the pension fund, the general organization of Saudi insurance, and Saudi fund for development. These government instit...