The Saudi Arabian Monetary Authority (SAMA) has issued new digital banking guidelines to be followed by digital banking players in Saudi Arabia.
According to the central bank, the digital banking guidelines of Saudi Arabia complement its banking licensing guidelines and minimum criteria.
These new digital banking guidelines issued by Saudi Arabia must be considered as additional conditions to be met along with the licensing guidelines for conventional banks, according to SAMA.
In a statement, SAMA said, “The additional guidelines are to keep up with the developments in the financial and information technology sectors and to achieve the objectives of the Financial Sector Development Program (FSDP) and Saudi Vision 2030 by developing the digital economy.”
According to the new digital banking guidelines issued by Saudi Arabia, digital banks must set up as a locally incorporated joint-stock company and also maintain a physical presence in the kingdom. They must also possess technological knowledge and have experience in the financial sector.
The digital banks also must have a clear business plan which includes IT infrastructure, financial projections, and a target segment. In some cases, digital banks operating in Saudi Arabia may have to set up consumer grievance centres, since digital banks don’t have physical branches.
Last year, SAMA started processing applicants for three new banking licences in the kingdom. Reportedly, two of the new licences will be for traditional banks and one will be for a digital bank.
During the same period, Saudi Arabia also updated its banking as well as digital banking licensing guidelines with an aim to make it easier for banks to apply.