SAMA Proposes Banking Law, Launches Open Banking Lab
The Saudi Central Bank (SAMA) is seeking comments, until February 24, 2023, on a draft Banking Law, issued an update on its work on the central bank digital currency (CBDC), launched the Open Banking Lab, and granted licenses to three new debt-based crowdfunding fintech firms. The licenses were granted to Forus, Tameed, and Raqamyah after successful testing of their solutions in the Regulatory Sandbox of SAMA.
The draft Banking Law comes as a result of its ongoing internal evaluations and out of its keenness to align with the legislative developments of the countries benchmarked to benefit from when the provisions of the law were made. The draft law expands the definition of banking business to explicitly cover credit granting in a separate article, enhances the legal framework for the Deposit Protection Fund, enhances the banking secrecy framework in the Kingdom, and establishes a legal framework to regulate financial technology in the banking sector (under general and special provisions covering digital banking, open banking, regtech, big data, and others).
Another related development involves the launch of the Open Banking Lab according to the Open Banking Framework issued by SAMA in November 2022. The Open Banking Lab will provide banks and fintech firms with a technical testing environment to enable them to develop, test, and certify their open banking services to ensure compatibility with the Open Banking Framework. It also aims to enable the consumers of financial institutions to securely share their financial data with a third-party provider. The implementation of open banking services is one of the initiatives of the Fintech Strategy, one of the pillars of the Financial Sector Development Program (FSDP) under the Saudi Vision 2030. The Fintech Strategy (May 2022) aims to make the Kingdom a global fintech hub where technology-based innovation in financial services is the foundation for enhancing the economic empowerment of individuals and society. The Saudi Central Bank is tracking the development of banks and fintech firms to ensure their readiness to launch open banking services within the first quarter of 2023.
Keywords: Middle East And Africa, Saudi Arabia, Banking, Regtech, Banking Law, CBDC, Open Banking, Crowdfunding Service Providers, Lending, Regulatory Sandbox, SAMA
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