SAMA Publishes Licensing Guidelines for Banks in Saudi Arabia
SAMA published guidelines that set out its licensing process for banks in Saudi Arabia. The guidelines and criteria apply to applicants seeking a license to carry on banking business in the Kingdom of Saudi Arabia under the Banking Control Law (BCL). The document outlines the general guidelines, the minimum criteria to be addressed by applicants, and the application procedures and the necessary information and documents to be submitted with an application.
These licensing criteria are applicable to all applicants, including foreign bank applicants intending to establish a foreign bank branch. SAMA will also assess the adequacy of capital for an applicant on a case-by-case basis depending on the scale, nature, and complexity of the operations as proposed in the business plan. Foreign Bank branches are not required to maintain capital in Kingdom of Saudi Arabia, although capital requirements may be set on a case-by-case basis—for example, specific requirements for those intending to conduct high-risk businesses and/or wanting to specialize in particular business lines that require specific level of capacity or competence.
The application process involves the preliminary consultation between SAMA and the prospective applicant to discuss the applicant’s plans to conduct banking business in the Kingdom of Saudi Arabia. SAMA will then review the application, post the submission of an application and relevant information, as detailed in the Licensing criteria and the application form. Foreign banks may apply to establish branches to carry on banking business in Kingdom of Saudi Arabia. For Foreign branches, references to "Applicant" means the parent entity. If any of the founders of a locally incorporated bank is a foreign bank, the foreign partner would also be subject to the requirements for the licensing of a foreign bank branch. Except as explicitly stated in the Prudential Standards of SAMA, foreign bank branches are subject to the same legislative and prudential requirements as locally incorporated banks. Although the prime responsibility for oversight of the Kingdom of Saudi Arabian operations of a foreign bank branch rests with local management and its head office as well as with the foreign bank branch’s home supervisor(s), the foreign bank branch is nonetheless required to submit its local operations to the prudential supervision and other statutory laws of SAMA.
Related Links
Keywords: Middle East and Africa, Saudi Arabia, Banking, Licensing Guidelines, Capital Requirements, Prudential Standards, Foreign Branches, SAMA
Previous Article
US Treasury on Exemption from QFC Recordkeeping RequirementsRelated Articles
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.
DNB Publishes Multiple Reporting Updates for Banks
DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.
NBB Sets Out Climate Risk Expectations, Issues Reporting Updates
The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting
EBA Updates Address Securitization Standards and DGS Guidelines
The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.
FSB Publishes Letter to G20, Sets Out Work Priorities for 2023
The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023
