General Rules for Savings Products in Banks

General Rules for Savings Products in Banks
(First Edition - Ramadan 1445 / March 2024)

Contents

Subject	Page No.
Chapter One: General Provisions	3
Chapter Two: Provisions on Savings Products	4
Chapter Three: Final Provisions	5

Chapter One
General Provisions

Article 1: Definitions
The meanings stated below shall apply to the terms wherever they appear in these Rules, unless the context indicates otherwise.

Term	Definition
The Bank	The Saudi Central Bank.
Banks	The licensed banks and financial institutions authorized to conduct banking business in the Kingdom in accordance with the provisions of the Banking Control System.
The Bank	A bank.
Customer	A natural or legal person.
Savings Products	Products that possess the following characteristics:
a. Restricted withdrawal operations by a specified number. b. Maintaining a minimum deposit amount.
c. A return payable to the customer in exchange for the deposit amount, in addition to the availability of characteristic (a) or (b).
The Deposit Amount	The amount deposited by the depositor in the bank's savings product.
---	---
Annual Equivalent Rate (AER)	The return on the deposit amount calculated as the Annual Equivalent Rate (AER) according to the disclosure rules for savings product rates issued by the Saudi Central Bank.
Deduction	A periodic deduction process from one of the customer's accounts, in addition to a specified amount, which the bank is authorized to execute by the customer's agreement with the bank.
Communication Means	Reliable communication means capable of being retrieved and recorded in written or electronic form.

Article 2: Objective and Scope

1. These Rules aim to create a general framework that encourages banks to offer and promote savings products, thereby stimulating customer utilization of these savings products.
2. These Rules apply to all banks when offering and presenting savings products to their customers.
3. These Rules do not conflict with related regulations, circulars, or instructions issued by the Saudi Central Bank.

Chapter Two
Provisions on Savings Products

Article 3: Design and Development of Savings Products

1. When designing and developing savings products, the bank is obligated to:
   1.1. Ensure product design quality based on the principles of transparency and disclosure, and offer and present it.
   1.2. Continuously evaluate the product's effectiveness and risks according to specific performance indicators.
   1.3. Ensure transparency, clarity, and accuracy of information in all product documents, including the initial disclosure and agreement.
   1.4. Provide flexibility for the customer to obtain benefits from the product, including its cancellation, except for products that require the opening or existence of a current account, or products provided through digital channels that involve automatic deduction.
   1.5. Include diverse product categories covering different customer segments, including: foreign residents, low-income individuals, and others, up to the eighth category.
2. The bank shall give importance to the development of its savings products, taking into account the best local and international products, practices, and standards.

Article 4: Advertising and Disclosure of Savings Products
When offering savings products, the bank is obligated to:
Allocate a section within the bank's electronic window to display them, including the following minimum details:

• Characteristics of each product.
• Terms of benefit.
• Frequently Asked Questions (FAQs).
• Ensure the currency of information through continuous review.
  Promotional advertisements must highlight the importance of savings products.

Article 5: Provision and Management of Savings Products
When providing and managing savings products, the bank is obligated to:

1. Take the required due diligence measures, including knowing the customer's identity, and verifying them using independent and reliable sources, data, or information, in accordance with the provisions of the Anti-Money Laundering System and the Counter-Terrorist Financing System, and the Executive Regulations and Circulars issued by the Saudi Central Bank regarding account identification.
2. Provide initial disclosure to the customer containing the contents specified in paragraph (3) of this Article.
3. Conclude an agreement with the customer containing the following minimum details:
   3.1. The return and its calculation mechanism.
   3.2. The Annual Equivalent Rate (AER).
   3.3. Any fees borne by the customer, including administrative fees.
   3.4. The scope of investment of the deposit amount.
   3.5. The obligations and rights of both parties, including withdrawal limits or the minimum deposit amount to be maintained.
   3.6. The circumstances under which the customer is not entitled to the return.
4. Provide the customer with a monthly statement containing the minimum details of the product, clearly showing the returns obtained since the start of the product.
5. Without prejudice to what was stipulated in paragraph (1,5) of Article Six, the agreement concluded with the customer shall be for a specified duration, and either party may terminate it after notifying the other party for a sufficient period, and the bank shall, upon termination, convert the deposit amount to a current account specified by the customer, if the parties agree to renew it upon expiration of its duration or termination of the agreement.

Article 6: Offering Savings Products to Non-Residents in the Kingdom

1. The bank is obligated to offer savings products to non-residents in the Kingdom, without violating the provisions of the Anti-Money Laundering System and the Counter-Terrorist Financing System, in the following cases:
   1.1. Obtaining authorization from the competent authorities in the customer's country of residence, in accordance with the laws of the customer's country of residence, including provisions on combating tax evasion and protecting personal data and other relations.
   1.2. Taking enhanced due diligence measures based on the "Third Party Reliance" requirements, which may be relied upon based on the "Anti-Money Laundering and Counter-Terrorist Financing Guidelines" issued by the competent authorities.
   1.3. Determining the withdrawal and deposit means and the level of risk of the customer.
   1.4. Offering these products solely in Saudi Riyals.
   1.5. The agreement concluded with the customer shall be for a specified duration, and either party may terminate it after notifying the other party for a sufficient period, and the bank shall, upon termination, convert the deposit amount to a current account specified by the customer, if the parties agree to renew it upon expiration of its duration or termination of the agreement.
   1.6. Obtaining prior written approval from the Saudi Central Bank before offering the product, including the targeted demand ratio of total deposits and time deposits at the bank.
2. Without violating the requirements of the banking account rules that necessitate closing the customer's current account upon final exit, the bank is permitted to keep the available amounts in the customer's account at the bank from savings products, whether upon the customer's request or after leaving the Kingdom or closing the current account.

Chapter Three
Final Provisions

Article 7

1. Banks are obligated to design, develop, provide, and manage savings products in accordance with these Rules.
2. These Rules take effect from the date of their issuance.