Regulatory Alerts2020-11-25
Issuance of the Saudi Central Bank Law
The Saudi Central Bank (formerly SAMA) issued a circular announcing the Royal Decree approval of its new governing Law, which replaces the previous SAMA System while preserving all existing supervisory duties, regulations, and legal tender status. The circular mandates that all financial institutions operating in the Kingdom adopt the new "Saudi Central Bank" name within 90 days across all internal and external communications and update corresponding documentation accordingly. Institutions are required to provide a written acknowledgment confirming their awareness of the circular's contents and compliance with its effective date.
[Saudi Central Bank Logo]
42023191 1442/04/10 Ref. No.
Circular
To the Esteemed, Peace be upon you,
Subject: Issuance of the New Saudi Central Bank Law.
I refer to the approval by His Majesty King Salman bin Abdulaziz Al Saud (may God protect him) of the Saudi Central Bank Law, which replaces the Saudi Arabian Monetary Agency (SAMA) System issued by Royal Decree No. (23) dated 1377/5/23 AH.
Please be informed that the new Law does not affect the duties and authorities of the Saudi Central Bank (formerly the Saudi Arabian Monetary Agency) or its supervisory and regulatory role stipulated in relevant current systems, such as the Banks Control System, the Cooperative Insurance Companies Control System, and other related systems. Consequently, all regulations, rules, and directives issued by the Saudi Arabian Monetary Agency remain in effect.
Furthermore, the Royal Decree stipulates that:
- The Saudi Central Bank replaces the Saudi Arabian Monetary Agency in its rights and obligations, wherever the name appears in relevant systems, regulations, orders, and decisions.
- The Saudi Central Bank retains the abbreviation SAMA.
- The current Board of Directors of the Saudi Arabian Monetary Agency shall continue to exercise all its authorities until a new Board of Directors for the Bank is formed in accordance with Article (Eighth) of its Law.
- Subject to Article (Fourth), Paragraph (1) of the Bank Law, currency issued by the Saudi Arabian Monetary Agency shall retain its legal tender status and discharge power against third parties, in accordance with the provisions of the Saudi Arabian Monetary Agency Law.
Accordingly, all financial institutions are required to adopt the aforementioned new name within (90) days from its date in all their internal and external communications. It is also noted that you are required to update all your documents to reflect the new name of the Central Bank.
I look forward to a written response to this circular confirming (1) awareness of its contents and (2) agreement to comply with it from its date.
Yours sincerely,
[Signature] Fahd bin Ibrahim Al-Shathri Deputy Governor for Supervision
Distribution Scope:
- Banks and financial institutions operating in the Kingdom, and branches of foreign banks.
- Financing companies operating in the Kingdom.
- Insurance, reinsurance, foreign insurance companies, and licensed free profession companies operating in the Kingdom.
- Credit reporting agencies.
- Exchange companies and institutions operating in the Kingdom.
- Payment companies and payment systems operating in the Kingdom.
- Money centers.