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1995-09-20

Instructions to Be Followed When Opening, Relocating or Closing Bank Branches, Instant Remittance Centers and ATMs, Whether Operational or Non-Operational

The Saudi Central Bank mandates that all licensed banks obtain prior written approval before opening, relocating, decommissioning, or altering the operational status of branches, instant remittance centers, or ATMs. The circular explicitly prohibits unauthorized site preparations, speculative bidding on licensed locations, merging standalone ATM licenses with branch licenses, and failing to complete installations within the nine-month license period. Banks are further required to submit feasibility studies, site sketches, and biannual status reports, and must notify the Authority of actual operational commencement dates or reasons for delays prior to license expiration.

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Saudi Central Bank Headquarters, Riyadh

General Department of Bank Supervision No.: 5387 / M.A / 214 Date: 25/4/1416 AH Corresponding Gregorian Date: .................................... Attachments: ....................................

Circular To All Banks Operating in the Kingdom

Dear / ....................................................................

Greetings,

Subject: Instructions to Be Followed When Opening, Relocating or Closing Bank Branches, Instant Remittance Centers and ATMs, Whether Operational or Non-Operational.

The Authority has recently observed an increase in violations committed by many banks by taking certain actions prior to obtaining the Authority's prior approval for such actions. The most prominent of these violations are as follows:

  1. Preparing premises for main offices or operational branches, and subsequently writing to the Authority to obtain approval to relocate from the licensed site to the prepared site.
  2. Opening offices at various locations for specific purposes and for a limited period, or at exhibitions or festivals.
  3. Closing operational branches, converting them into offices, or reducing banking activities therein.
  4. Preparing, installing, or operating ATMs without a license.
  5. Relocating or decommissioning operational or non-operational ATMs without obtaining the Authority's approval.
  6. Engaging in speculation and bidding on sites previously licensed to a bank, which deprives the site of banking services.
  7. Merging ATM licenses with licenses for operational or non-operational branches.
  8. Failing to follow up on completing the opening of branches and machines within the nine-month license period, and failing to report reasons when requesting renewal for why the bank did not open the branch or install the ATM.

Saudi Central Bank Headquarters, Riyadh

General Department of Bank Supervision No.: .................................... Date: .................................... Corresponding Gregorian Date: .................................... Attachments: ....................................

Given that banks' adherence to these procedures constitutes a clear violation of the Bank Supervision System and the prevailing regulations in this regard, we request that you inform your relevant staff of the necessity to follow and observe the following instructions:

a) No bank shall be permitted to open new branches, other offices, or ATMs in any region of the Kingdom without first obtaining an official license from the Authority. b) Upon obtaining the Authority's license to open a branch or install an ATM, it shall not be relocated from one place to another without obtaining written approval from the Authority, whether the branch is operational or non-operational, or whether the machine is operational or non-operational. c) When the bank obtains the Authority's approval to open a branch at any site, the installation of an ATM at the branch shall be subject to the branch's license, and there is no need to obtain a separate license for the machine; rather, the Authority shall be notified thereof. d) It is not permissible to merge the license of a standalone ATM ((outside branch premises)) with any branch, whether operational or non-operational. e) The license duration is nine months from the date of approval issuance, and the bank must follow up to complete the opening within this period. If opening is not possible during this period, the bank must inform the Authority of the reasons prior to the expiration of the license period. f) Licenses for non-operational branches shall be extended every six months to provide the bank with the opportunity to prepare the site. g) The bank shall provide the Authority, at the end of every six months, with a report detailing its status regarding branch openings or ATM installations. h) When requesting approval to open a branch or install an ATM, the bank must attach the following data:

  • A feasibility study for opening a branch or installing an ATM.
  • A sketch map indicating the exact location of the requested branch or machine. i) The Authority must be notified of the actual opening date of the branch and its commencement of operations, or the date the machine is put into operation.

Yours sincerely,

Assistant General Manager of Bank Supervision Ali Al-Ghaith Mahmoud Abdulwahab Thar Al-Qusaybi 1

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