FAQ

What are the major objectives of SAMA?

Under article one of SAMA’s charter, the objectives of SAMA are as follows: a. Issue the Saudi currency and enhance its value inside and outside the Kingdom.b. Work as the government’s bank.c. Supervise commercial banks and money exchangers. Moreover, SAMA has been recently entrusted with the function of supervising insurance business under the Cooperative Insurance Companies Control Law issued by Royal Decree No. (M/32) dated 2/6/1424. In order to achieve its objectives, SAMA seeks to maintain the stability of prices, including the stability of the Saudi Riyal exchange rate. SAMA receives and pays out payments on behalf of the government and manages official foreign exchange reserves and government debt. SAMA, as a banking regulatory and supervisory authority, also endeavors to maintain financial stability by applying Banking Control Law and prudential regulations (Link for the Monetary and Banking Regulations and Instructions Booklet). Furthermore, SAMA is keen to be guided by financial standards and principles set by international institutions for strengthening market practices.

What does the organizational chart of SAMA consist of?

You can look at the organizational chart of SAMA by using the following link: SAMA’s organizational chart

What does monetary policy mean?

Monetary policy is a number of measures and procedures taken by the central bank with the objective of maintaining the stability of domestic prices level and the currency exchange rate and, consequently, achieving sustainable economic growth. The importance of monetary policy stems from the importance of the objectives sought by the central bank because they have a great impact on monetary and financial stability, the creation of an environment appropriate for optimum investment of economic resources and achieving the development of the various economic sectors. Monetary policy also has a great impact on capital markets by affecting interest rates.

What are the objectives of monetary policy in the Kingdom?

First: Maintaining stability of prices level, including the exchange rate of the Riyal.As known, the Kingdom of Saudi Arabia has been applying the fixed exchange rate of the Riyal against the American dollar since 1986, while the exchange rate of the Riyal against other currencies changes depending on demand and supply force. Therefore, maintaining the stability of the Riyal exchange rate is one of major objectives of monetary policy in the Kingdom. Second: Maintaining stability and development of the financial sector.The Saudi Central Bank seeks to maintain the stability and development of the financial sector in the Kingdom by creating a strong and technologically developed financial sector subject to strong supervision and control that will prevent sharp fluctuations in interest rates that may affect economic activity. The stability of the financial sector is essential to enhance saving and attract further investments to the Kingdom

How does SAMA implement monetary policy?

To achieve the objectives of monetary policy, SAMA has several tools that enable it to manage liquidity and efficiently monitor monetary market positions. The most important of these tools are: 1- Reserve requirementsA. Statutory reserveUnder Article seven of the Banking Control Law issued by Royal Decree No. M/5 dated 22/2/1386H., banks operating in the Kingdom shall maintain with SAMA statutory reserves (a ratio of banking deposits). The ratio of statutory reserves changes depending on economic developments that occur. This is an important and effective tool in supervising the banking credit and affecting monetary liquidity. B. Liquid reserveIn addition to the statutory reserve, and in accordance with Article seven of the Banking Control Law referred to above, banks operating in the Kingdom shall maintain with SAMA a liquid reserve, i.e. a certain ratio of total banking deposit liabilities in form of short-term assets that can be converted into cash within a month. Therefore, the cash available with banks operating in the Kingdom that can be used in lending transactions represents the difference between total deposits and total reserve requirement. 2- Repo agreementsRepo agreements of government securities are an important tool available to SAMA to manage domestic liquidity. This tool is used with the objective of injecting liquidity in the banking system or absorbing liquidity from it. 3- Fx swap in foreign exchange marketFx swap and reverse Fx swap agreements, that are valued and conducted on the basis of market interest rates, aim to affect capital flows by reducing turbulences of the monetary policy resulting from developments in foreign exchange markets. Such agreements are an important tool for conducting the monetary policy and they are characterized by being more flexible in terms of maturities and volume. The agreements are used when the Saudi Riyal is exposed to speculative pressures by providing the banking system with the necessary liquidity to deal with these emergent cases. Foreign exchange swap agreements are carried out effectively between commercial banks to manage their liquidity and cover their financial positions in first place.

What is the role of SAMA in encouraging Islamic banking business?

There is a growing demand, in the Kingdom, for Shari’ah compliant banking products and services. SAMA recognizes this matter and encourages banks operating in the Kingdom to meet market requirements and provide non-interest banking services and products. At present, all banks operating in the Kingdom are providing Islamic banking services and their business in this area is growing rapidly. The volume of theses activities varies from one bank to another. That is, some banks provide all their services and products in compliance with Islamic banking approach while others provide these products and services in certain branches, units, and departments or through investment in mutual investment funds. SAMA recognizes the special features of Shari'ah compliant banking business which is subject to the same control, supervision and regulation applied on traditional commercial banking business. Thus, capital adequacy and liquidity standards and other supervisory and control requirements are also being applied to the Islamic banking business. SAMA also requires banks operating in the Kingdom to submit special prudential reports on their activities. It is worth mentioning that SAMA is one of the founders of the Islamic Financial Services Board (IFSB) based in Malaysia. (Link for Islamic Financial Services Board (IFSB))

What is the main function of the Research and Statistics Department in SAMA?

Article five of SAMA’s Charter, issued by Royal Decree No. 23 dated 23/5/1377H, provides “The Authority shall establish a research department to conduct and analyze data needed to assist the government and the Authority in formulating and carrying out financial economic policies”. In addition to providing economic advice for SAMA’s senior management, the functions of the Research and Statistics Department are focused on compiling all statistical economic data in all fields, such as monetary, financial and banking areas as well as data on national accounts, real sector activities and the private sector activities including data on balance of payments and other statistics. The Department is concerned with examining, classifying and publishing these data in SAMA’s periodical reports. (Link for Monetary and Banking Regulations and Instructions Booklet: http://www.sama.gov.sa/RulesRegulation/BankingSystem/Pages/Home.aspx)

What is the nature of the function of the Research and Statistics Department?

The Functions entrusted to the Department can be summarized as follows:• Compile economic information and data.• Analyze all economic indicators and variables.• Make future macro-economic predictions for monetary policy and for following up all developments that may affect financial stability. • Prepare applied research and studies in various economic areas. • Publish data relevant to SAMA function through annual and quarterly reports, and monthly and quarterly statistical bulletins.• Prepare various reports particularly those related to functions of central banks. • Follow-up economic research, studies, periodicals, publications and reports issued by international institutions. • Provide regional and international economic, financial and monetary institutions and organizations with the Kingdom’s monetary and banking data and balance of payments data.

Why does the annual report include developments in all economic activities? In other words, why is not it restricted to financial, banking and monetary aspects which are the concern of SAMA?

The report is one of the most important official sources and references in the Kingdom that reviews each year the various areas of the Saudi economy and it could be the sole comprehensive reference that includes all economic and social areas in the Kingdom. Moreover, the report provides a long series of various official statistics. Therefore, it is important to continue to follow this approach in order to serve the Saudi economy and those who seek official data on the Kingdom.

What are the stages of preparing SAMA’s annual report?

The stages of preparing SAMA’s annual report can be summarized as follows:- Compile data and information regularly from all official authorities.- Classify and categorize incoming data and information and analyze and review them by specialists at SAMA. - Prepare and write the analytical section of the annual report and categorize and arrange data of statistical section.- Review chapters and statistical sections and ensure their consistency and accuracy of their data.- Translate chapters into English.- Print the annual report in its final form. It is worth mentioning that the report is issued in both Arabic and English and it covers the first quarter of the year in which it is published and the preceding Gregorian year. The report is fully prepared by Saudi cadres who make great efforts to be published on time. Each year, thousands of copies of the report are distributed for free. The report is also posted on SAMA’s website on the internet and it is available on CDs. Copies of the annual report can be requested by directly contacting SAMA or mailing the Research and Statistics Department on the following address: Saudi Central Bank the Research and Statistics DepartmentB.O. Box 2992, Riyadh 11169Saudi Arabia

It is noticed that SAMA’s annual report does not deeply analyze causes and effects resulting from changes?

The annual report addresses, by analysis, the most prominent changes in monetary, banking and financial areas. Expanding the analysis will actually make the size of the report too big, which is not good. Moreover, the function of reports in general whether economic ones or others is to provide a technical description of developments without expanding on addressing related causes and effects as this is the role of a recipient who can refer to studies, research and reports that are conducted for certain purposes. Economics, in fact, is a social science characterized by greatly different views on causes and effects.

Who is the targeted category of the annual report?

The targeted people are those who are interested to know facts about the Saudi economy from their official sources. The annual report is prepared to serve the Saudi economy and provide official information and data for all researchers and economic and investment decision makers.

Why is the annual report published late? It is not published until the third quarter of the year?

The annual report covers various areas of the economy and includes data of the ended year and data of the first quarter of the current year (for monetary and banking data) in addition to SAMA's balance sheet ending in the sixth month of the Gregorian year in question. Collecting and examining data obtained from all concerned bodies require many efforts. Moreover, the preparation of the annual report needs revision, editing and printing which take more than three months after obtaining all data and information. The report will only be published after its presentation to His Majesty the Custodian of the Two Holy Mosques, namely, in the third quarter of the Gregorian year.

It is noticed that new chapters continue to be added to the annual report, why?

The annual report is characterized by its flexibility and changeability to keep up with developments in the Saudi economy. There are major constant chapters in the annual report and other chapters that can be added or taken out depending on developments and what is useful for readers.

Is it possible to contact with readers on the content of the report?

Yes, there is a questionnaire with each report for comments by the reader and his suggestions on the report for its development. Moreover, the report is posted on SAMA’s website on the internet through which contact can be made.

Why does not the report make predictions about the future performance of the Saudi economy?

The main objective of the report is to provide a clear picture of economic developments of a preceding year. In fact, it is useful to give a future vision about the performance of the economy. Given the characteristics of the Saudi economy, however, it greatly depends on oil which is difficult to make predictions about its future developments. International specialized agencies operating in the area of energy and oil encounter the same problem, causing them re-make their estimates many times a year. Moreover, the domestic economic base is still under the process of expansion, growth and diversification. The report is available for all (specialists and non-specialists). In order to maintain the quality of the report, such type of analysis is avoided in the report and the task of publishing such predictions is left to international organizations and institutions and special consultation agencies.

Is SAMA the source of all statistics issued in the annual report?

No, of course. There are much data in the annual report whose source is not SAMA, but are requested from ministries, departments, various government agencies, and some private sector companies and institutions.

What are the statistics whose only source is SAMA?

Monetary, banking and balance of payments statistics.

What are the bulletins and reports issued periodically by the Research and Statistics Department?

There are several statistical bulletins and periodical reports issued by SAMA as follows: - The Annual Report. (http://www.sama.gov.sa/sites/SAMAEN/ReportsStatistics/Pages/AnnualReport.aspx)- Quarterly Economic Developments Report (published only on SAMA’s website on the internet). (http://www.sama.gov.sa/sites/SAMAEN/ReportsStatistics/statistics/Pages/QuarterlyStatistics.aspx)- Quarterly Inflation Report (published only on SAMA’s website on the internet). (http://www.sama.gov.sa/sites/SAMAEN/ReportsStatistics/Reports/Pages/InflationList.aspx)- Quarterly Statistical Bulletin (http://www.sama.gov.sa/sites/SAMAEN/ReportsStatistics/statistics/Pages/QuarterlyStatistics.aspx)- Monthly Statistical Bulletin (http://www.sama.gov.sa/sites/SAMAEN/ReportsStatistics/statistics/Pages/MonthlyStatistics.aspx)

What are the dates of issuing these statistical bulletins and quarterly reports?

Monthly and quarterly reports and bulletins are often published after 4 to 5 weeks from the end of the period subject of the publication.

What is the difference between the monthly statistical bulletin and quarterly statistical bulletin?

The monthly statistical bulletin contains monthly data, where it shows data for twelve months in addition to the data for the last four years. The quarterly statistical bulletin, on the other hand, shows quarterly data. It also includes other statistics that are not published quarterly, such as data on investment funds, specialized credit institutions and consumer loans.

What is meant by domestic liquidity?

Domestic liquidity has several definitions, namely: the narrow definition (M1) which includes money circulated outside banks plus demand deposits only; and (M2), which includes (M1) plus time and savings deposits. The broad definition (M3) which includes money circulated outside banks plus demand deposits, time and savings deposits and quasi-monetary deposits.

Is there cooperation with statistical data bases outside SAMA?

Yes, there is cooperation with the Central Department of Statistics and Information's data base at the domestic level and with the IMF’s data base and BIS’s data base at the international level.

How are SAMA’s statistical bulletins and reports obtained?

The content of monthly and quarterly statistical bulletins is fully published on SAMA’s website. Statistical bulletins, as hard copies, can be obtained by directly contacting SAMA or by registering in the mail list at the Research and Statistics Department via the following address: Saudi Central Bank General Department of Research and StatisticsP.O. Box 2992, Riyadh 11169Kingdom of Saudi ArabiaFax: (966) 1 – 4662353or via E-mail (STAT_DEP@SAMA.GOV.SA)

For queries about some data, which entity or person should be contacted?
What are the available communication means through which a researcher can contact SAMA?

Saudi Central Bank General Department of Research and Statistics P.O. Box 2992, Riyadh 11169 Kingdom of Saudi Arabia Fax: (966) 1-4662439 or via E-mail (info@sama.gov.sa)

In case I face a problem while using an ATM (SPAN card) (Non-payment of the required amount, payment of a portion of the required amount, only a portion of the amount was deposited or the whole amount was not deposited), what entity should I turn to for solving such a problem?

In case any problem occurs while using an ATM (SPAN), a customer should keep the receipt and approach the bank issuing the card used in the transaction, or call the bank on its toll free number. If the customer is unsatisfied, he may turn to the Banking Inspection Department (Complaints Unit) at SAMA.

In case my card is withdrawn by an ATM, what should I do?

You should contact the bank issuing the card to inform it of this or approach the bank.

How can I protect my card against theft by others who may use it for withdrawing from my own account at the bank?

- Keep your ATM card and its related PIN intact and do not disclose the PIN to any person whomsoever. - You should not choose a PIN consisting of your date of birth or any part of your telephone number. - Never write the PIN on the card itself.- Do not write the PIN on a piece of paper and keep it at the same wallet where you keep the card.

If the ATM card has been lost for any reason, is there a risk that it may be used for carrying out electronic withdrawal transactions or purchase transactions from my account at the bank?

Such a transaction can not be made without having the card's respective PIN. In case an ATM card is lost, you should directly contact the bank to inform it.

I lost my own ATM card and it was used for carrying out a transaction of cash withdrawal from my account through an ATM, what should I do?

Phone up the officer in charge at the bank you deal with promptly and tell him about the loss of your own card and ask him to invalidate it. Then, go to the nearest police station to file a complaint so that it, in its turn, addresses the bank concerned and demands the television filming of the ATM transaction charged on your account.

How secure is the use of the debit banking card (Saraf cards)?

Using the ATM card is very highly secure worldwide. To ensure having such a high degree of security, you should merely maintain the confidentiality of your own PIN.

Can the PIN of a banking card be changed from anywhere?

In fact, we advise that the PIN be changed from time to time for further security purposes. This can be made only through the ATMs pertaining to the bank issuing the card.

If the transaction via a POS terminal was rejected and I paid the value of the commodity, and then I discovered that the amount was debited in my own account, how can I refund my money?

Through submitting an objection to the transaction at the bank issuing the card via phone banking.

If there occurred an error in the amount of the transaction (either an increase or decrease) which was only detected after having left the shop, whom should I turn to?

The bank issuing the card.

Are there any additional fees debited in a customer's account for carrying out cash withdrawal transactions through an ATM or purchase transactions through a POS terminal?

Only the cash amount withdrawn from an ATM or the amount paid for purchased commodity through the POS terminal is debited in a customer's account even if the ATM or POS terminal pertains to a bank other than the bank issuing the card.

What are the fees charged for fund transfers through "SARIE"? and How long does it take to execute a transfer transaction?

Government employees are not charged any fees for payroll transfer services via SARIE (through the government entity where they work). As for fund transfers by citizens and banks' customers, banks offer reduced and competitive rates for transacting fund transfers via SARE. SAMA's instructions related to fees for transfer transactions require that maximum fees which a bank can impose on its customer (both clients and non-clients) for each single transfer shall be the following:• Up to a maximum of SR 25 for a transfer made on the same day prior to SARIE payment cutoff time (which is approximately 3:30 afternoon) provided that the transfer should reach the beneficiary on the same day of deposit.• Up to a maximum of SR 15 for a transfer carried out during the period following the day of depositing (forward date transfer) provided that the transfer should reach the beneficiary within the next SARIE business day (next value date) or any forward value date designated by the sender (transfers deposited in the evening, i.e. during the period after 3:30 afternoon until the end of banks' working hours in the evening as well as those carried out during the morning periods of following days would be considered forward date transfers).• A customer not having an account with a bank has the right to use fund transfer services upon providing all details and information required by SAMA and presenting them to the bank carrying out the service.• A nominal fee of SR 2.20 for each individual Direct Debit request.

In case of a delay in the transfer, what should you do?

In such a case, you should first make sure that the data filled in the transfer request form are accurate and then turn to the bank executing the transfer transaction and ask for the reasons for delay.

In case of a delay in depositing your monthly salary, what should you do?

You should turn to the entity (authority or department) where you work, and you should also soon contact the bank (to which your salary is transferred) and ask for an explanation of the reasons for delay.

If I am not satisfied with the rejection of my claim by the bank, what should I do?

The Banking Inspection Department, as an autonomous and competent department, receives complaints and considers them and then informs the customer of the results. It should be known that all these services are free of charge, and SAMA has a toll free number for receiving complaints (8001245558) through which you can enquire during the official business hours, i.e. from 8:00 A.M. until 2:30 P.M.

I wish to obtain a consumer loan (personal loan) to be repaid by installments deducted from my monthly salary, what are the maximum number of years for full repayment of the loan?

The maximum period is five years (60 installments).

What is the maximum monthly installment that a bank may deduct from my monthly salary for repaying the loan?

One third (net) of your monthly salary if you are an employee or a quarter of it if you are a pensioner.

How should I act if I go to one of the banks operating in the Kingdom to open an account, but the bank requires that a certain amount must be deposited for opening the account, refers me to another branch or fixes for me another subsequent date for opening the account?

Banks are given clear-cut instructions to open accounts for all customers and others wishing to open accounts without requiring a minimum amount of money and without delay. If happened otherwise, please file a complaint against the bank at the nearest SAMA's branch.

How should I act if I go to one of the banks operating in the Kingdom to encash a cheque to my order; however, the bank's employee informs me that (the drawer's account has a nil balance, the cheque is uncovered or the signature is not matching etc…)?

Ask the bank's employee to provide you with a rejection paper of not encashing the cheque ( a document explaining the reason for not encashing the cheque), then submit this document to the Commercial Paper Committee at the Ministry of Commerce and Industry.

In case I lost (bank cheques, traveler's cheques, ATM card or credit card) what should I do?

You should immediately inform your bank to invalidate it.

In case that a bank's employee refuses to collect payment for a public utilities bill (telephone, electricity or water etc…), how should I act?

You file a complaint against the bank at the nearest branch of SAMA.

In case a bank refuses to take small banknote or coins, what should I do?

File a complaint against the bank at the nearest branch of SAMA.

In case a bank refuses to reimburse me for worn out money?

File a complaint against the bank at the nearest branch of SAMA.

Can I transfer or transport funds to the Kingdom or abroad through other persons or via freight offices, businesses or general services providers or the like?

No, because only commercial banks and money exchangers are authorized to transfer funds to the Kingdom and abroad. Any individual or legal person who carries out such activity shall be deemed a violator and shall be subjected to punishment as per the Anti-Money Laundering Law and the Banking Control Law. Transferring funds via unauthorized entities involves economic and security risks and puts such funds at risk as these unauthorized entities are not supervised or controlled by any domestic or international authority, apart from legal penalties and the loss of your money to which you will be subject to if you resort to such entities for fund transfer.

In case I transfer a sum of money from my account to another account inside or outside the Kingdom, and the value of the transfer (or portion of it) is not received by the beneficiary, what should I do?

File a claim to the bank through which the amount has been transferred.

What should I do if:- A transaction of (withdrawal from or transfer to) my account has been carried out without my knowledge.- A cheque has been encashed and its amount has been debited in my account without my knowledge.

This may be due to an error. Therefore, you should make a claim to the bank. If no solution is reached, you can file a complaint to the security authorities who, in turn, address SAMA for taking necessary actions as such incident may involve a criminal case.

Am I held accountable for banking transactions carried out through my account at the bank if such transactions have been undertaken by a person authorized to operate my account?

Yes, you and the authorized person are jointly accountable for these transactions.

What is the damage that might be incurred by owners of business firms when they authorize other persons to operate the accounts of these firms at banks?

If such authorized person exploits the authorization to carry out suspicious banking transactions, both the firm's owner and the authorized person will be held jointly accountable for such act. Therefore, owners of such firms should operate the accounts of their businesses and companies by themselves, and if they are unable to do so, they should directly supervise all banking activities carried out by the authorized person.

How can I protect myself against being a tool for practicing suspicious or illegal financial transactions?

Do not allow any body you do not trust to carry out banking transactions in your account whether by allowing him to carry out banking transactions through your account or granting him an authorization to use your account; or to be asked by someone to collect or transfer funds to other accounts or other persons inside or outside the Kingdom because you will not be exempt from responsibility in case those transactions are illegal.

What are the entities authorized to check out balances and accounts, stocks, deposits and investments with banks operating in the Kingdom?

The entities are:1. Shari'ah courts and Grievance Board.2. The Ministry of Interior.3. The regions' emirates.4. The Ministry of Finance.

What are the entities empowered to attach balances and accounts, stocks, deposits and investments at banks operating in the Kingdom?

The entities are:1. Shari'ah courts and Grievance Board.2. The Minister of Interior.3. The regions' emirates.4. The Ministry of Finance, based on the resolutions issued by the Committee for the State's Funds Collection and the recommendations issued by the Banking Settlement Committee. 5. CMA Chairman, based on the resolutions of the Settlement Committee for Financial Securities Disputes.6. The Chairman of the Investigation and Public Prosecution Authority and heads of its branches in case of money laundering cases.

I have an objection against:- Share trading transactions (selling or buying) concerning both prices and quantity? - Transactions of share subscription for companies floated to public subscription (or subscribing for the increase in the capital of a joint-stock company) whether a subscription transaction is not accepted, non-allocation of shares subscribed for or non-refunding of oversubscription? To whom should I complain?

If you have any of the above mentioned complaints, you must file your complaints directly with the Capital Market Authority (CMA).

What are the types of payment cards issued by banks?

There are several types of payment cards issued by banks, but the most common cards are:1. Debit card (ATM card): this card allows a person to directly debit an amount from his current account to pay to a vendor. It can be obtained after opening an account with a bank. The bank issues the card for the customer and links it to his/her account. The customer cannot use it for cash withdrawal from ATMs or POS terminals unless the balance of the account is in a credit position. 2. Credit card: is the card banks issue for their customers in cooperation with international payment companies e.g. Visa, MasterCard, American Express etc. The holder of the card can use it to carry out cash withdrawal transactions or pay the value of his/her purchases at commercial centers accepting this type of card and he/she can repay the amount later. The customer may repay the total amount or repay the prescribed minimum amount, which ranges between 3 percent to 6 percent of the total amount, and, consequently, an interest rate will be added to the remaining amount according to the agreement with the bank issuing the card.3. Debit card is the card issued by banks for their customers in cooperation with international payment companies e.g. Visa, MasterCard, American Express …etc.. The holder of the card can use it to carry out cash withdrawal transactions or pay the value of his/her purchases at commercial centers accepting this type of card. This card is different from a credit card since the customer is required to repay the total due amount immediately upon receiving an account statement. There are other types of cards, but they are less common and are rarely used, such as prepaid cards, smart cards and corporate cards.

What are the benefits of using credit cards?

One of the reasons behind the widespread and use of those cards at the international level is the special characteristics that these cards offer for the card holder, the vendor accepting the card, or the issuing bank. If it is maintained well and used when necessary in an elaborate way, it will offer many benefits to its holder, the most important of which are as follows: 1. An easy instrument to use and keep.2. A secure instrument that spares the trouble of carrying cash money. 3. You can use it daily to carry out any transaction. 4. All executed transactions can be reviewed and checked through obtaining a monthly account statement. 5. You can benefit from the grace period and repay after a period of 20-50 days from the execution date of the latest transaction.6. A useful financial instrument that helps in financial planning when used in a well deliberated way. 7. Many shops and centers accept those cards (some of those cards are accepted by more than 25 million shops centers at the international level).

What are the risks of using credit cards?

Using a credit card in a careless way may lead to significant risks that affect the customer's credit record and his ability to repay and manage his financial liabilities. The most significant risks are as follows: 1. An easy financial instrument that encourages consumption if its use is not controlled. 2. The possibility of being used by others, especially relatives (son, daughter, husband or wife) if it is not safeguarded. The cards can be used to carry out transactions through the telephone. 3. The possibility of being lost, stolen and used by another person. 4. Paying additional amounts as fees in case of default or repaying part of the amount.5. Increased commission and interest rates linked to the use of credit cards. 6. It is considered one of the financial instruments that require ongoing monitoring, sound management and compliance with repayment dates.

What does an applicant need to know when applying for a credit card?

Every person wishing to apply for a credit card has to make sure that he/she has an answer for the following questions: 1. Why should I have a credit card? 2. Have I understood the conditions and controls of the agreement for careful use and dealing therewith? For example, do I know the amount of the various fees, card interest rate in case of a delayed repayment, annual issuing fees, default fees, cash withdrawal fees, and fees for exceeding credit limit? 3. Can I repay every month the total amount of purchases by the credit card? Or the minimum amount only? 4. If I did repay the minimum amount, can I repay additional commissions on the existing balance? 5. What is the bank's procedure towards me in case of default?

What are the most significant terms the holder of the credit card should know?

- The Customer: is the person wishing to obtain a credit/debit card from a bank or a company licensed by SAMA. - Issuing entity: a bank or a company that issued a card for a customer upon his/her request. It has the right to monitor the transactions of the card holder even if the card was issued in cooperation with a licensed commercial shop operating at the Saudi market. - Card issuing agreement: the entity that issued the card shall give the customer a copy of the agreement to be acquainted with conditions and for his approval. The agreement items include the card interest rate and how it can be calculated, various transaction fees and rights and obligations of each party. - Account number: every credit card has a certain account number. The card holder should keep the number all the time and should not disclose it unless he ensures the good reputation and integrity of the company/ vendor he is dealing with. He should always keep the receipt/documents of the executed transactions. - Credit limit: is the total credit amount that a customer can use to carry out purchase transactions. The credit limit for every customer is determined according to several criteria. The most important of these criteria are customer's eligibility, credit record and the internal credit policy of the issuing entity. - Credit information companies: are those companies licensed to monitor credit records of individual customers through establishing a data base to gather, study, and analyze the credit conduct of customers in the Kingdom of Saudi Arabia. - Saudi Company for Credit Information (CIMA): It was established as a limited liability company, operating at the Saudi market under the supervision of SAMA to provide support to banks and companies regarding the users of banking credit services and transactions. The company manages the sources of credit data on behalf of banks/companies to enable them to use the data and help them in providing credit and managing their relationship with individual customers. - The credit report: a report issued by CIMA which is a summary of the credit history of the customer and his/her previous and current transactions. The report includes basic information about the customer, the most important of which are: 1. Customer’s personal data (name, ID number, age, address, job, income, social status…).2. Records of the enquiries made about the customer during the last five years.3. History of customer’s compliance with repayment of his/her liabilities during the last two years. 4. Default records during the last five years. The customer has the right to obtain a copy of his/her credit record from CIMA once every year to review it and ensure the correctness and accuracy of the information mentioned in it. - Commission rate: it measures the credit cost and it is a monthly percentage imposed by the issuing entity on the existing debit balances of the card. It is always recommended to repay the total due amount upon receiving the account statement to avoid paying commissions. - Annual issue fees: annual fees determined based on the type of the card to be paid by the card holder to the issuing entity. - Repayment due date: is the date upon which the card holder must repay the total balance of the card or part of it. In case of non-repayment on the specified date, delay fees will be imposed on the card holder by the issuing entity. - Cash withdrawal fees: when using the credit card to withdraw cash from the ATMs, a commission is imposed on this service. - Default charge: when the amount is not paid on the date specified in the account statement, the card issuer shall calculate a charge on default of payment.- Card activation: before activating the card, most card issuers ask the customer to contact them upon receiving the new or renewed card as a control measure to verify the customer’s ID and then the card is activated.

In case of an objection to the information available in the credit register, what entity can I turn to?

It is the bank you deal with. In case the matter is not settled, you can object directly at the Saudi Credit Information Company (or Saudi Credit Bureau (SCB)).

Which entity I should approach in case of an objection or a problem regarding the credit card?

The objection must be filed along with supporting documents with the card issuer without any delay. The bank or the company that issued the card is the entity that should examine and settle the objection, and inform the customer about the conclusion.

What are the best tips to prevent fraud operations and credit card abuse?

1. Do not give your credit card to anyone and protect it at all times.2. Sign on the back of your credit card as soon as you receive it.3. Destroy obsolete or expired credit cards.4. Keep an eye on your credit card during cash withdrawals.5. Do not write your PIN on your credit card.6. Never put your PIN in your wallet.7. When you do not wish to tip waiters at restaurants and other places, you must draw a line on the assigned blank spaces of the receipt so that no one can tamper with it.8. Retain the receipt and compare it with your account statement upon arrival from the bank.9. Notify your card issuer immediately once you have found any discrepancies in your account statement or transaction that you did not make.10. When you do on-line shopping, you must deal with a well-known, reputable company or entity, and make sure that they have a Secure Sockets Layer (SSL) when you enter the data of your card.11. Request and review your credit record annually.12. Keep a list of the numbers of your credit cards as a reference when needed.13. Contact the card issuer immediately and report the lost or stolen card, then send a fax to confirm the reporting, and keep these documents.

What are the best tips to help an individual run his/her financial affairs soundly?

1. Do not give your credit card to anyone and protect it at all times.2. Sign on the back of your credit card as soon as you receive it.3. Destroy obsolete or expired credit cards.4. Keep an eye on your credit card during cash withdrawals.5. Do not write your PIN on your credit card.6. Never put your PIN in your wallet.7. When you do not wish to tip waiters at restaurants and other places, you must draw a line on the assigned blank spaces of the receipt so that no one can tamper with it.8. Retain the receipt and compare it with your account statement upon arrival from the bank.9. Notify your card issuer immediately once you have found any discrepancies in your account statement or transaction that you did not make.10. When you do on-line shopping, you must deal with a well-known, reputable company or entity, and make sure that they have a Secure Sockets Layer (SSL) when you enter the data of your card.11. Request and review your credit record annually.12. Keep a list of the numbers of your credit cards as a reference when needed.13. Contact the card issuer immediately and report the lost or stolen card, then send a fax to confirm the reporting, and keep these documents.

What is the purpose of cooperative insurance?

The purpose of cooperative insurance is securing protection for subscribers against future and unexpected risks, and restoring the financial status of the insured to the state he/she had been in before the occurrence of the risk. This is accomplished through mutual cooperation among insured persons.

What is meant by insurance interest?

It is the legal right of a natural or juristic person to insure an object (a car for instance) subject of insurance. In other words, to insure an object, it is provided that there should be a verifiable legal relationship between the person and the subject of insurance. An example of legal relationship is “ownership”; if you own a house or a car, you have the right to insure it, whereas a person may not insure his neighbor’s house, for example, due to the absence of an insurance interest.

What is meant by deduction/charges percentage (participation in payment)?

It is the portion to be paid (specified in the policy chart) by the beneficiary (the insured) in case a policy-covered risk took place. For example, a car accident costing SR 5,000 for repairs, and the amount of charges as per the policy is SR 1,000, the company shall pay SR 4,000 and the insured shall bear SR 1,000.

What is meant by the insurance coverage limits?

It is the maximum limit of the insurance company’s liability as specified in the policy chart before applying any deductions/charges. For instance, the maximum limit of the insurance company’s liability as specified in the motor insurance policy is five million Saudi riyals for material damages and five million Saudi riyals for physical losses, and any amounts beyond that shall be borne by the insured, not the company.

What is the compulsory motor insurance policy?

The compulsory insurance policy covers the damages caused to individuals and property by your vehicle. This policy does not cover the damages afflicting you or your vehicle when driving. For example, when an accident takes place and you are 100% the cause, the insurance company will pay for all the damages made by you, but will not pay you any compensation for damages afflicting you or your vehicle.

What is the comprehensive motor insurance policy?

In such policies there are two parts, the first part relates to the insurer’s liability for the insured’s car (covers the vehicle against fire, theft, and incidental accidents). The second part relates to the insured’s liability towards a third party (property and individuals). For instance, when two vehicles have an accident, the comprehensive insurance policy covers all damages caused by or afflicted on you. The company shall pay all the costs for repairing your car, repairing and compensating all the damages of the third party that you caused and are responsible for.The comprehensive motor insurance program can be expanded for an additional premium where it covers the following:a. Renting an alternative vehicle for the insured while the damaged one is being repaired.b. Roadside assistance service.c. Repairing broken-down vehicle at the dealer or a local garage.

What are the things that you should pay attention to when purchasing a comprehensive motor insurance policy?

1. Limits of Coverage:The amount of coverage stated in the policy or the vehicle’s market value at the time of the accident, whichever is lower, represents the insurance company’s maximum liability for compensation. Make sure that you report the actual value of your vehicle to the company when insuring it, and at each renewal of insurance policy without addition or diminution because the insurance policy is a compensation policy not an enrichment one. 2. Percentage of Depreciation:The idea of depreciation applied to the object subject of insurance refers basically to the principle of compensation which aims at restoring the insured to his same financial position prior to the loss occurrence. This method is used widely by insurance companies as a means to compensate for the actual value of the damage resulting from the covered loss, taking into consideration the presumed lifecycle of depreciated spare parts. Example: if a car had an accident causing it to be totally wrecked after six months of insurance, and it was worth SR100,000 upon the purchase of the insurance policy, the insurance company will not indemnify the insured for the whole amount, but it shall deduct the amount of depreciation of the car for six months.3. No Claims Discount (NCD):Some insurance companies offer the insured (vehicle owner) what is called “no claim discount’ by which they reduce the insurance premium for next year due to having a claim-free and accident-free record over the previous insurance year. This is to encourage drivers to avoid traffic accidents. On the other hand, some companies raise the insurance premium for the new insurance year if the insured submitted a claim during the previous year.

What are the documents supporting the claim in motor insurance?

All documents proving and supporting the fact that the person insured is the vehicle’s driver when the accident occurred, the insurance coverage validity and the circumstances of the incidence from which the claim resulted. They also include the accident report from the traffic police department and any other original documents the company might require, such as: * Driving license* Vehicle registration card* Insurance policy

What are the exceptions of the policy?

It is necessary to be aware of the cases where the insurance company is not responsible for indemnifying you for the damage that might be incurred by your car due to an accident. They are included in the policy under “Exceptions” or “Exceptions from the coverage limits” or “General exceptions”. Example:* Catastrophe risks.* Risks resulting from driving a car by a person under the age of 18.

What are the types of property that can be covered?

Insurable property can be divided into three categories:a. Buildings: the structure of the building and its attachments are covered by the insurance policy.b. Machines and other contents: everything except stock that might be inside storehouses or inside the building.c. Stock: all property of the insured or in his custody and the items and goods kept by an organization whether it owns them or not.

What are the insurance coverage limits of property insurance?

1. Covering the subject of insurance itself whether it is real estate or a movable asset against risks (e.g. fire, theft, pipe crack, natural hazards, etc.).2. Contents of the subject of insurance.3. Personal liability.4. Legal liability against death cases caused by incidental accidents to property and casualties.5. Covering rent loss for the landlord due to the real estate’s unsuitability for rent because of a defect or risk covered by insurance according to the insurance policy.6. Providing an alternative accommodation while the damaged real estate is being fixed.

What risks are excluded from the property insurance?

a. Damages resulting from riots and domestic strikes and disturbance provided that it was not agreed on adding them in the insurance policy.b. Damages ensuing from wars whether declared or undeclared.c. Damages of radioactive contamination whether it is the direct cause or not.d. Injuries or destruction because of pollution.e. All types of consequential losses.f. Terrorism risks.g. Damages ensuing from maritime risks are to be excluded if it was agreed on excluding them by the insurance policy.

What is meant by medical (health) insurance?

Medical (health) insurance is the insurance on medical treatment costs, medications, all medical and therapeutic services and supplies and management of medical programs.

What is meant by the benefit brought to the insured in medical insurance?

It is the costs of providing health services included by the insurance coverage within the limits specified in the policy chart.

What is base of direct entry or in the company’s account in the medical insurance?

It is the facilities of no-payment available for insured persons with the services providers appointed by the company, according to which all those expenses are directly debited on the company’s account.

What is meant by a service provider in medical insurance?

It is the person or health facility which is accredited and licensed according to applied regulations to provide medical services in the Kingdom, for example, a hospital, diagnosis center, clinic, pharmacy, laboratory or a physiotherapy or radiotherapy center.

What is meant by the service providers’ network in medical insurance?

It is a group of health service providers accredited by the Council of Cooperative Health Insurance (CCHI) and specified by the insurance company to provide the service for employer/policy holder, and directly debit on the insurance company’s account upon presenting a valid insurance card by the insured.

What are the supporting documents when making a claim in medical insurance?

All documents proving and confirming the age, nationality, identity of the insured person as well as the validity of the insurance coverage, the circumstances of the incidence from which the claim resulted and repayment of costs. They also include other documents such as: bills, receipts, prescriptions, doctor report, referral and recommendations and any other original documents that might be requested by the company.

What diseases and cases that are usually excluded by insurance companies from the medical insurance?

1. Surgical plastic operations unless the surgery is necessary due to a defacement ensuing from an accident, and it was made for that reason.2. Chronic diseases suffered from before the coming in force of the insurance policy such as diabetes.3. Routine medical check-ups such as employment or travel checkup.4. Steroids and vitamins.

Does the insured bear part of the medication cost or does the insurance company bear the whole cost?

It depends on the type of policy; some policies do not require the insured to share the cost while others stipulate paying a specific portion of the costs based on the company’s agreement with the insured. In general, the value of the insurance policy in which the insured does not share paying a portion of the costs is higher than the one in which he shares payment of part of the cost.

What is meant by protection and savings insurance?

It is a contract by which the insurer undertakes to pay to the beneficiary an amount or amounts including the savings proceeds on a future date against subscription paid by the beneficiary.

What are the types of protection and savings insurance?

There are several types of protection and savings insurance such as:-Protection insurance: includes insurance operations which are associated with consequences of death, and permanent or temporary full or partial disability of individuals or groups.-Protection and savings insurance: includes insurance operations under which the insurer pays an amount or amounts including the savings proceeds, on a future date, against subscriptions paid by the insured.

How can I differentiate genuine paper currencies from (fake) counterfeit ones?

SAMA was very careful when it designed paper currency; it added many specifications that make it easy for currency users to differentiate genuine paper currencies from (fake) counterfeit ones, such as:- Paper feel (authentic banknotes have a scabrous feel and embossed writings).-Color visibility and consistency.- Distinguished security features (available in detail on this (Link), and illustrative booklets on these features may be obtained from the closest SAMA’s branch (Link)).

What should I do when someone gives me a suspicious banknote?

If you are sure that it is unauthentic, do not take it; you should cooperate with competent authorities by reporting the person who tried passing this paper to you to the nearest police station. If you are not sure, you may ask this person to replace the banknote by another one.

What should I do if I find out that I have a counterfeit banknote?

If you are sure where it came from, you should cooperate with the competent authorities by reporting the source of that banknote to the nearest police station. If you have doubts about its source or you are not sure where it came from, you can submit it to the nearest SAMA branch (Link) or police station and write a report on the incidence.

What is the penalty for catching someone in possession of fake paper currency (Saudi or non-Saudi) or trying to pass or promote it?

Doing any of these acts is a crime that exposes its perpetrator to fall under the hand of the law under Royal Decree No.53 dated 5/11/1382H (Link). All countries of the world seek protection of their currencies and deal strictly with whoever commits such criminal acts.

Can I print, publish or use pictures of the Saudi paper currency or parts thereof?

To ensure the circulation of only genuine currency and to safeguard the interests of cash users in the Kingdom, the fourth and fifth Articles of the Penal Regulations for Forgery and Imitation of Currency issued under Royal Decree No. M/12 dated 20/7/1379H (Link) do not permit printing, publishing or using pictures of the Saudi currency or parts thereof without obtaining a license from SAMA (Link), and perpetrators of such acts shall be subject to accountability and falling under the hand of the law as it is the case in most countries.

What is the penalty for distorting the Saudi currency by writing, punching, or tearing?

Since the currency is a homeland symbol, distorting it is a waste of economic resources and indicates a lack of awareness of how important this symbol is. In addition, a person who deliberately commits these acts shall be subject to punishment by law in accordance with Royal Decree No. M/12 dated 20/7/1379 H (Link).

What should I do with mutilated currency (washed, torn, deformed or burned)?

SAMA provides replacement service of damaged currency according to Royal Decree No. M/6 dated 1/7/1379 H (Link) and instructions issued in this regard. A replacement application can be made to one of SAMA branches (Link) as follows: o Washed or torn currency Will be compensated directly (after ensuring that all parts are complete and distortion is not deliberate.) o Worn-out currency Worn-out currency is sent to a specialist committee to determine the amount of compensation. o Burned currency  Currency remnants are sent to a specialist committee to determine the amount of compensation on the basis of parts presented. A fire incident report from the Civil Defense must be attached to the application (you are advised to present all your cash residues preserved as much as possible in a container to avoid their fragmentation).

To which authority the Financial Academy belongs?

To which authority the Financial Academy belongs?
the financial academy is an independent legal and administrative entity since 2020.

Are there any branches for the Institute in the Kingdom?

There are no branches for the Institute in the Kingdom, but it holds its training courses and standard tests in all major cities of the Kingdom.

Where is the Institute of Banking located?

The Institute is right behind the Ministry of Higher Education on Al-Ma’ther Street in Riyadh.

What is the website address of the Institute?

http://www.iobf.org/

Is it possible for individuals to attend courses at their own cost?

The Institute primarily serves the staff of SAMA and the banking and financial sectors. However, there are many programs and courses which individuals can attend at their own cost directly.

What certificates the Institute gives to individuals?

The Institute grants several professional degrees and diplomas, for further details check the Institute’s website. http://www.iobf.org/content/index.asp

Are diploma study periods counted at the university or in the CSB?

Since the Institute primarily serves domestic banks and financial institutions, all diplomas and programs of the Institute are widely accepted in such entities. This is what the Institute concentrates on.

Is it possible to obtain a certificate of stock exchange (Tadawul) from the Institute?

In respect of this program, the Institute accepts only staff of banks and financial companies licensed by the Capital Market Authority.

Does the Institute provide courses for women?

The Institute of Banking has a separate women’s Training Center that provides all its courses for female staff of banks and financial institutions as well as individuals. It is located currently at the female part of the Nojood Commercial Center behind SAMA headquarters in Riyadh.

How many are the training hours and what are the working hours?

The number of actual training hours is seven per day; from 8 am to 2 pm. Working hours at the Institute are from 8 am to 4 pm.

Does the Institute provide its courses in morning and afternoon sessions?

Short courses are provided in the morning only, while English language courses are provided in the morning and afternoon. Diploma programs are in the afternoon only.

Is there a library at SAMA?

Yes, there is a specialized library at SAMA working during office hours: 8 am- 2:30 p.m.

Is the library open for visitors? If so, how can they benefit from the contents of the Library?

Yes, it is open. Anyone can visit the library during office hours. There are designated places intended to those who wish to visit, read and photocopy whatever material they choose, according to the rules applied.

What are the receptacles of information available in SAMA Library?

The library contains: *Many Arabic and foreign books specialized in economic, financial and banking aspects. *Reports of public and private local sectors and bodies. *Reports of international organizations, bodies and institutions such as the IMF, World Bank and Bank for International Settlements (BIS).*Arabic and foreign periodicals are available in electronic databases or printed. *There are terminals in place to access global information networks such as Reuters and Bloomberg.* There are also other terminals for specialized research networks.

The five-riyal polymer banknote

Is the previous banknote issue valid?

Yes, and there is no need to replace it.

Why was the polymer material chosen?

Because it gives the banknote a prolonged life-time and promotes its efficiency.

Can a polymer note be forged?

It is difficult to forge, because of its cutting-edge technology in preparing the transparent film adapted to boost colors fastness and the security features. This is only done in the currency printing factories.

Why was it decided to update the five-riyal banknote?

Because it is the most circulated banknote. The updated version will increase the efficiency of its circulating.

Does the new banknote offer benefits for the blind?

Yes. A prominent decorative print pattern on the note helps blind and visually impaired people recognize the denomination value.

What is the main material used in producing the new banknote?

The new the five-riyal banknote is made of polypropylene produced by Saudi petrochemical companies.

What are the dimensions of the new five-riyal polymer banknote?

145X66 MM.

Project Aber FAQ

In light of the rapid developments that we are witnessing today, especially in the field of innovative financial technologies, a number of central banks and relevant international organizations have started to study the dimensions, expected impacts and uses of certain products and technologies. The most important of them are the digital currency of central banks and blockchain and distributed ledger technologies. As a start point, those studies have mainly attempted to validate the concept from a technical point of view. They have focused on examining such technologies and their expected effects on financial transactions.

Saudi Central Bank has worked in partnership with the Central Bank of the United Arab Emirates (CBUAE) to trial a common wholesale central bank digital currency (wholesale Central bank digital currency) through the application of distributed ledger technology (DLT). A number of banks participating in the project from both sides have used the common digital currency for cross-border payments.

What is Project Aber?

Aber is an innovative initiative, launched jointly by SAMA and the Central Bank of the United Arab Emirates (CBUAE). The project aims to study and evaluate the feasibility of using distributed ledger technology to develop cross-border payment systems between Saudi Arabia and the UAE. The project phases have been designed, implemented, managed, and operated over one year.

What is the added value of Project Aber?

Project Aber provides an opportunity to study distributed ledger-based infrastructure, the technical dimensions of the central bank digital currency (CBDC), ways of issuance and trading of the CBDCs, and interbank settlements. This pilot project aims to prove the viability of using specific technologies and to understand the technical and operational effects on the current infrastructure. Therefore, it will provide some data that would form the base on which other studies could be built. Such future studies might explore the effects of distributed ledger technologies on the financial policy and stability.

What is the expected effect of the project on financial innovation?

Project Aber is one of the pioneering experiments around the world as it uses distributed ledgers to make cross-border financial transactions. The project has been carried out under the supervision of the two central banks (SAMA and the CBUAE) and with the participation of a number of their regulated banks. This pilot project will enhance financial innovation as it intends to test a specific idea. It will provide central bank counterparts and stakeholders with a better image of the challenges, accompanying technical risks, and the mechanisms adopted to overcome and address them.

What is the nature of the currency used in this project?

For the purposes of this project, an experimental digital currency was jointly issued and fully backed by SAMA and the CBUAE. The digital currency uses encryption and is based on distributed ledgers. It is intended for use by only the two central banks and the participating banks in Saudi Arabia and the UAE.

What is Wholesale CBDC?

Although there is no agreed-upon official definition, a wholesale central bank digital currency (wholesale CBDC) may be described as a unit of digital payments issued by a central bank and that has the status of legal tender. The digital currencies are classified, as per the nature of their users or the purpose of their issuance, into two types: (1) Wholesale CBDC for the use of financial institutions, especially banks and payment companies, for interbank transfers and settlements (this type is used in Project Aber), and (2) Retail CBDC for consumer use in payment transactions.

Did the project use real funds?

The use and linking of real funds were of the key features of the Project Aber. The participating commercial banks provided real funds from their reserves at the central banks to finance their digital currency accounts.

The use of actual funds has helped central and commercial banks to study the mechanisms and methods through which digital currency will be managed in their ledgers, and to identify the basic banking systems that would be affected in case of implementing and expanding the scope of such system in the actual operational environment. The pilot project provided a number of learned lessons and valuable observations to commercial banks that they would not have had without using actual funds.

What is the purpose of the common wholesale CBDC?

This currency was issued by the central banks of both countries as part of this project to determine the technologies and technical platforms most appropriate for the use of central banks. The project also studied CBDC performance in banking transactions and impact on several levels. It should also be noted that the issued CBDC was limited to the use of the two central banks and the banks participating in the project.

Is this digital currency an alternative to the Saudi riyal or the Emirati dirham? And is it available to individuals or financial institutions?

The digital currency is not an alternative or substitute to the official currencies used in both countries. The digital currency is issued for limited experimental transactions in accordance with the framework of the project only, through the central banks of both countries and the banks participating in the pilot project.

Can this digital currency be circulated?

The issued digital currency is non-circulating currency by virtue of its experimental nature and limited use for the purposes of Project Aber.

Can individuals or other entities use this digital currency?

Individuals and other entities cannot use this digital currency, as it is issued exclusively for the use of the two central banks and the banks participating in the project.

Has the project demonstrated the feasibility of distributed ledger technology in raising the level of performance without compromising user privacy?

User privacy is one of the most important principles of choosing the technology used in the project, in addition to being a basic requirement for designing the solution used in Project Aber. During the project, the system was designed with high levels of privacy while making the most of the features of distributed ledger technologies.

Was the blockchain used in the pilot project open or closed?

The pilot project used closed blockchain due to the limited number of participating parties and in order to achieve the optimal risk management.

How does the central bank issue and destroy the CBDC in the pilot project?

The solution designed in Project Aber allows central banks only to issue and destroy the digital currency. Therefore, the digital currency will be issued and destroyed by a request through which the central bank converts cash into digital currency and vice versa via the account of the commercial bank.

Was the impact on monetary policy and financial stability measured in the pilot project? And why?

Project Aber addressed only the technical and operational aspects of using blockchain and distributed ledger technologies for CBDC. Thus, the economic impact, especially on monetary policy and financial stability, and the regulatory implications are suggested for further study in the future. This includes decisions related to monetary areas, such as exchange rates and interest rates that must be applied to the CBDC.

What is coming next based on Project Aber?

Project Aber was developed based on the experiences and projects completed in this field. In turn, Project Aber significantly and valuably contributed to the aspects included in the project. The same applies to subsequent projects, as they can benefit from what has been achieved by Project Aber in order to expand knowledge and expertise in issuing CBDC and using blockchain and distributed ledger technologies in cross-border payments.

Open Market Operations

Open Market Operations: Background and Objectives

The Saudi Central Bank has launched complementary open market operations ("OMO") to its current offering of SAMA Bills to enhance short-term liquidity management in the local banking system.

What are Open Market Operations?

OMO are used by SAMA as tools to inject and withdraw short-term liquidity to and from the local banking system, in a manner consistent with its mandate of maintaining monetary and financial stability in the Kingdom.

By launching the latest complementary element, SAMA aims to address potential short-term liquidity needs in the local banking system on a systematic basis. In liquidity injecting transactions SAMA purchases eligible securities, as defined by SAMA's collateral policy, with an agreement to resell the securities at a future date. The difference between the purchase and resale price will reflect the lending rate.

How will SAMA determine the short-term liquidity needs of the local banking system?

SAMA manages short-term system liquidity based on a number of considerations, including, but not limited to, SAMA's assessment of current and projected liquidity conditions as well as desired policy outcome(s).

How often will liquidity injecting OMO be offered?

A certain level of liquidity will be offered regularly via OMO on a biweekly basis. However, SAMA may offer liquidity via OMO on an ad hoc basis if it deems necessary.

What are the maturities of the regular liquidity injecting OMO?

Beyond SAMA's standing overnight repo facility, liquidity injecting OMO will be conducted regularly (biweekly) over three different tenors, namely, 7 days, 14 days and 28 days, which together reflect the specific needs of the local banking system.

What is the Open Market Operations' pricing?

Pricing will be determined based on SAMA's assessment of local liquidity needs and desired policy outcome(s).

Which parties are eligible to participate in liquidity injecting OMO?

The eligibility criteria for participating in the liquidity injecting OMO matches those for SAMA's overnight repo facility, such that any entity with a valid SAMA banking license and access to the Saudi Arabian Riyal Interbank Express "SARIE" (i.e. local banks and branches of foreign banks) is eligible.

What is meant by the bulletin of foreign exchange rates against the Saudi Riyal issued monthly by the Saudi Central Bank (SAMA)?

SAMA issues this monthly bulletin for use by government agencies only; it is not intended for the public and it does not reflect the actual index of exchange rates prevailing in the market.

Are the rates issued by SAMA binding to local banks to apply in banking transactions?

Exchange rates fluctuate rapidly and each bank has a certain margin of profit in the process of selling and buying, so rates issued by SAMA are not binding to banks to apply.

What sources on which SAMA relies for issuing foreign exchange rates?

SAMA depends on global markets through specialized global information networks such as: Bloomberg and Reuters.

Which entities can request the transfer or issuance of a cheque in foreign currencies through SAMA?

Government agencies and local and foreign banks by cheques drawn on SAMA or by debit entry in an account opened with SAMA.

What are the currencies which SAMA transfers or issues a foreign check in?

SAMA receives requests for transfer or issuance of foreign cheques in all foreign currencies available.

What is the competent department at SAMA that handles transfers or issues cheques in foreign currencies?

It is the Remittances Department. Correspondence is directed to His Excellency Director of the Remittances Department at SAMA headquarters in Riyadh.

What procedures are in place to request the issue of a real estate title deed for a property owned by the title deed which is lost?

1. SAMA receives letters from a number of official agencies such as courts and Notaries Public enquiring about missing title deeds to issue replacements thereof. 2. Circulars are sent to banks in three combinations a week, then ten days are set from the date of the circular to provide SAMA with any comments on title deeds mortgaged to them. 3 - After the expiry of the time limit, and, in the event of non-receipt of comments from any of the banks operating in the Kingdom, an answer is provided to all agencies that have already inquired about the missing title deeds.

SAMA FAQ