SAMA issues additional guidelines for digital banks in Saudi Arabia

The Saudi Arabian Monetary Authority (SAMA) issued the additional licensing guidelines and criteria for digital-only banks operating in Saudi Arabia to keep up with the developments in the financial and information technology sectors.

The guidelines aim to achieve the objectives of the Financial Sector Development Program (FSDP) and Saudi Vision 2030 by developing the digital economy, the kingdom’s central bank said in a statement.

The newly issued guidelines and criteria include the minimum requirements to be met for obtaining a license to establish a digital-only bank in the Kingdom.

To apply for a digital-only bank license in Saudi Arabia, the following conditions must be met:

1) The digital-only bank should be set up as a locally incorporated joint-stock company.

2) A promoter should have:

A. Experience and knowledge in the financial industry;

B. Appropriate technology-related experience and knowledge; and

C. Financial capacity to support setting up the digital-only bank.

3) An applicant must possess a team with adequate expertise to discuss relevant aspects of the application.

SAMA further noted that applicants are required to submit an Internal Capital Adequacy Assessment Plan (ICAAP) and an Internal Liquidity Adequacy Assessment Plan (ILAAP) along with the application.

Accordingly, SAMA will assess the capital adequacy of the applicants on a case-by-case basis considering the scale, nature and complexity of the operations as proposed in the business plan, ICAAP and ILAAP of the applicants.