Al Rajhi Bank

Banking Policies Department

Reference No.:
Attachments: 2
Date: 19/12/1438
Attachments: 2

Circular / Very Important

Respected,
To:
Greetings,

Subject: Controls for Handling Banking Transaction Procedures.

Based on the powers delegated to the Saudi Arabian Monetary Authority (SAMA) under its system issued by Royal Decree No. 23 dated 23/05/1377 AH, the Banking Control System issued by Royal Decree No. M/5 dated 22/02/1376 AH, and Ministerial Decision No. 2149/3 dated 14/01/1406 AH regarding the issuance of instructions whenever necessary. It refers to the Authority's strategy and objectives, which include aligning with the goals of Saudi Vision 2030, raising the level of services and cooperation with government entities, especially those authorized by law to request execution on bank customers' accounts (such as holds, etc.) or to provide information or documents related to them, to accommodate the increasing number of transactions received from them, which is expected to double in the near future. It also refers to what the Authority has previously emphasized in previous instructions regarding the importance of banks completing all transactions within the specified time and manner, in accordance with the provisions of relevant systems, most notably the Execution System and its executive regulations, the Anti-Money Laundering System, the Sharia Litigation System, the Criminal Procedure System, the State Revenues System, the Value Added Tax System, the Executive Regulations governing the rules and procedures for collecting Zakat from taxpayers, and the Royal Order No. 34945 dated 03/08/1438 AH regarding the referral of contracts, concessions, documents, financial penalties, and any other source of statutory revenues issued by the state to the execution court. Given the importance and sensitivity of these transactions and their direct impact on bank customers, as their responses entail rulings and decisions that may convict or acquit them, or establish or not establish rights based on them. This is to ensure the protection of banks and their employees from exposure to procedures or penalties by the Authority or under the other aforementioned systems.

The following are the controls that must be adhered to when dealing with banking transaction procedures. The Authority emphasizes that responsibility lies with banks and financial institutions towards the entities authorized by law, towards the Authority, and towards the customer in case of violation of the controls of this circular. Necessary regulatory procedures will be applied in case of non-compliance.

For information, and to acknowledge receipt within two weeks from the date of issuance and provide proof of meeting the requirements and controls contained in this circular.

Accept my regards,

Mr.
Ahmed bin Abdullah Al Sheikh
Deputy Governor for Supervision

Distribution Note:

• Banks and financial institutions operating in the Kingdom.
• Category (A) financial institutions.

P.O. Box 2992, Riyadh 11169, Telegram Address: Markazi, Tel: 404400, Phone: 4633000, Fax: 4667414

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Banking Policies Department

First: Transaction Processing Periods:

1. Immediate action must be taken to complete banking transaction procedures received from the Authority, not exceeding the following periods:

Transaction Category	Maximum Completion Time
Judicial Banking Procedures	2 Working Hours
Civil (General) Banking Procedures	2 Working Days
Security Banking Procedures	5 Working Days

2. In the case of no relationship with the person (natural/legal) at the Bank/Institution, the response to the transaction must be immediate.

3. The Authority may, at any time and whenever necessary, reduce the maximum completion time for some banking transaction procedures mentioned in paragraph (1) for the Bank (First), and banks and institutions must complete transactions within the specified periods.

Second: Departments and Units Dealing with Banking Transaction Procedures:

1. Grant full authority to departments and units dealing with banking transaction procedures to process transactions, directly execute on customer accounts, disclose information, and establish mechanisms to facilitate the easy and rapid provision of bank documents related to transactions.

2. Provide sufficient human resources to process transactions during official working hours and keep pace with the increased workload.

3. Provide necessary technical resources to ensure compliance with the controls of this circular and keep pace with changes in increased workload.

4. Units and their staff must enjoy independence and devote themselves exclusively to dealing with banking transaction procedures.

5. Commit to continuous follow-up of banking transaction procedures received by the Bank/Institution and complete them within the specified periods to avoid delays, accumulation, or carry-over to the next day.

6. Develop plans to address risks of human resource shortages, technical failures, or any risks affecting business continuity.

7. Emphasize to those units the confidentiality of data and information contained within banking transaction procedures and prohibit disclosure, publication, or allowing access to such data and information to any person for any reason.

8. Exceptions to the prohibition mentioned in paragraph (7) of the Bank (Second) mentioned above include cases where the inquirer has a statutory status (bank customer or their private agent) when inquiring about transactions related to the execution on their accounts, which are exclusively transactions affecting the customer's balance such as (holding balances), accounts, lifting holds on balances and accounts, prohibiting transactions, lifting transaction prohibitions, forced deduction from accounts by transfer or issuing checks, or seizing balances, suspending accounts or lifting suspension). After verifying the status of the inquirer, and regarding judicial banking transaction procedures, in addition to the request number and date, the customer is provided with the court decision and its date, and the customer is referred to the competent court.

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Banking Policies Department

Third: Transaction Processing Mechanism:

1. Execute the content of transactions on the Bank/Institution's system as required within the periods specified in paragraph (1) of the Bank (First), and fill in the fields in the SAMA Net system in accordance with their content.

2. Bank responses must reflect the procedure taken by the Bank/Institution.

3. If the transaction involves original documents (original checks, original bank documents), they must be sent before the expiration of the time specified in paragraph (1) of the Bank (First) above, and the shipment number of the original documents mentioned in this paragraph must be stated when responding to the transaction in the SAMA Net system. The originals of each transaction must be in a separate closed envelope attached to an official letter addressed to the Manager of the Banking Procedures Branch, indicating on the envelope the transaction information related to it in the SAMA Net system.

4. Adhere to the instructions governing the processing of transactions, including, for example: the specified processing mechanism, the required processing mechanism, rules for opening and operating bank accounts, and other relevant systems and instructions.

5. Adhere to the controls of Circular No. 381000058769 dated 07/06/1438 AH regarding the mechanism for reporting SAMA Net system problems and failures.

Fourth: Verification of Instruction Implementation:

1. The Authority will verify the Bank/Institution's compliance with these instructions as follows: sending alerts to the Bank/Institution in case of delay in completing transactions beyond the specified periods, accumulation, or carry-over to the next day, with the Bank/Institution required to take immediate corrective action as indicated in the alerts sent by the Authority, as receipt constitutes evidence of the Bank/Institution's failure to comply with the aforementioned instructions.

2. Banks and institutions must provide the Authority with a quarterly report including a self-assessment by the Bank/Institution regarding the extent of compliance with all requirements and controls of this circular, starting from the third quarter of the current year 2017 AD. These reports are to be sent to the Manager of the Banking Procedures Branch within a period not exceeding two weeks from the end of the quarter, and adherence to the specific form for these reports, which will be communicated to you later.

3. The Authority's Performance Monitoring Team will directly follow up on all transactions sent to banks and financial institutions to ensure compliance with the aforementioned requirements.

4. Field verification of the extent of compliance with the controls of this circular and office verification through studying and analyzing reports, data, and observations, and monitoring bank performance regarding banking transaction procedures.

P.O. Box 2992, Riyadh 11169, Telegram Address: Markazi, Tel: 404400, Phone: 4633000, Fax: 4667414