Regulatory Alerts2009-05-10
SAMA Approval to Provide Remittance Services
The Saudi Arabian Monetary Authority mandates that all licensed banks and exchange houses obtain prior approval before contracting with specialized international money transfer companies, citing increased risk and systemic responsibility. Licensed institutions must also review existing contracts to ensure compliance with domestic regulatory requirements, including anti-money laundering and outsourcing controls. These entities are required to submit their approval requests and report on compliance actions within one month of the circular's issuance.
In the Name of Allah, the Most Gracious, the Most Merciful Saudi Arabian Monetary Authority Head Office
Banking Supervision Department No.: 464/5/M 24696 Attachments: Urgent Circular Date: 15/7/1430 AH Corresponding Date: 10/7/2009 AD
Dear Bank, Greetings:
With reference to the Authority's Circular No. M At/107 dated 14/2/1428 AH and Circular No. 44102/M At/830 dated 9/11/1428 AH regarding the enhancement of financial transfer services provided by licensed banks and exchange houses, and clarifying the legal status of companies and financial transfer agencies dealing with local licensed banks and exchange houses.
And in light of the potential increase in risks and systemic responsibilities associated with transfer operations for licensed banks and exchange houses specifically, and the soundness and reputation of the banking sector in the Kingdom generally, which may result from licensed banks and exchange houses contracting with specialized international companies to provide money transfer services without obtaining prior approval from SAMA.
Therefore, we wish to confirm that all licensed banks and exchange houses authorized for money transfer operations must obtain prior approval from SAMA before contracting with any specialized transfer companies.
Furthermore, licensed banks and exchange houses with existing contracts must review these contracts to ensure compliance with all applicable regulatory requirements in the Kingdom, as well as related instructions and controls issued by SAMA, including circulars on transfer operations, rules for opening and operating bank accounts, anti-money laundering (AML) and counter-financing of terrorism (CFT) regulations, and outsourcing controls. They must then submit to SAMA for approval the continuation of dealings with these companies, and report on actions taken in this regard within one month from the date hereof.
Yours sincerely,
Deputy Governor for Technical Affairs Dr. Abdulrahman bin Abdullah Al-Humaidan
Distribution Scope:
- All banks operating in the Kingdom
- Licensed exchange houses (Category A)
P.O. Box 2992, Riyadh 11169, Central Telegraph, Telex 404400, Tel. 4662440, Fax 4662865