Saudi Arabia granted digital banking licence to two firms as the use of finance technology spreads in the Middle East.
The Council of Ministers approved two licences to digital banks with a capital of SR4 billion, the Saudi Central Bank (SAMA) announced.
Minister of Finance Mohammed Al-Jadaan, chairman of the Financial Sector Development Program, and Dr. Fahad Bin Abdullah Al-Mubarak, governor of the Saudi Central Bank, expressed gratitude and appreciation to the Custodian of the Two Holy Mosques, King Salman and Crown Prince Muhammad bin Salman, for the Cabinet’s approval to license two local digital banks.
First, STC Pay will be converted into a local digital bank, with a capital of SR2.5 billion (STC bank). Second, a number of companies and investors, led by Abdul Rahman Bin Saad Al-Rashed and Sons Company, will establish a local digital bank to conduct banking business in the Kingdom, with a capital of SR1.5 billion (Saudi Digital Bank).
Al-Jadaan said that the Cabinet’s approval reflects the leadership’s keenness to keep pace with the rapid development in the FinTech sector and to empower the Kingdom to be among the largest financial hubs in the world.
He added that the Financial Sector Development Program, one of the Kingdom’s Vision 2030 realization programs, seeks to keep pace with global developments in the financial services and FinTech during 2021-2025 to underpin economic diversification.
On his part, the SAMA governor clarified that with the approval of the Council of Ministers, the Saudi Central Bank will recommence its work to finalize technical and operational requirements for the two banks to start their banking activities in the Kingdom.
The governor drew attention to the fact that digital banks are subject to supervision and controls applied currently to commercial banks operating in the Kingdom, with an increased focus on aspects of technology, cyber security, anti-money laundering, tracking terrorist financing as well as operational risks.
Al-Mubarak pointed out that digital banks provide services and products exclusively through electronic channels by adopting an innovative and sustainable banking business model to enhance the financial inclusion and keep pace with cutting edge technological developments in the financial sector.
It is worth mentioning that the Saudi Central Bank has been actively engaged in supporting innovation and maintaining confidence in the financial sector by developing the digital economy and enabling FinTech companies to support the growth of the private sector.
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