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2022-10-20

Creation and Regulation of the Statutory Reserve for Money Changers

The Saudi Central Bank issued this circular to establish and regulate a statutory reserve for money exchange centers operating in the Kingdom. The directive mandates that these centers allocate at least 10% of their annual net profits (after covering accumulated losses) to the reserve, with allocation permissible to cease once the reserve reaches 30% of paid-up capital. Furthermore, centers must obtain written no-objection from the Bank before utilizing the reserve, without compromising their existing cash reserve obligations under current regulations.

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Saudi Arabia

Saudi Central Bank

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Saudi Central Bank

Reference No.: 44025244 Date: 1444/03/24 Attachments: None

Circular

To: Respected Parties,

Peace, mercy and blessings of God be upon you,

Subject: Establishment and Regulation of the Statutory Reserve for Money Changers.

Based on the powers granted to the Saudi Central Bank under its system issued by Royal Decree No. (M/36) dated 1442/04/11 AH, and the regulations governing money exchange activities issued by Ministerial Decision No. (4686) dated 1441/11/21 AH, and in light of the Bank's role in supporting the stability of the money exchange sector, enhancing confidence in it, and increasing the financial capacity of money centers, as well as assisting money centers in facing risks and ensuring continuity and growth; the following has been decided:

  1. Money centers shall allocate not less than (10%) of their annual net profits, after covering accumulated losses (if any), to establish a statutory reserve. Money centers may suspend allocation if the total amount reaches (30%) of paid-up capital.
  2. Money centers shall obtain written no-objection from the Saudi Central Bank prior to using the statutory reserve referred to in paragraph (1) of this circular.
  3. The provisions of this circular do not affect the cash reserve that money centers are required to maintain in accordance with Article (Seven) of the regulations governing money exchange activities.

For information and action as of its date, and money centers are required to take the necessary regulatory actions to implement and comply with this circular.

Yours sincerely,

Yazeed bin Ahmed Al-Sheikh Deputy Governor for Supervision

Distribution Scope:

  • Money centers operating in the Kingdom

P.O. Box 2992 Riyadh 11169, Kingdom of Saudi Arabia Tel: +966 11 4633000 P.O. Box 2992 Riyadh 11169, Kingdom of Saudi Arabia Tel: +966 11 4633000

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