Mubasher - Badour Al-Raei: The year 2024 witnessed a number of decisions, amendments and projects taken by the Saudi Central Bank (SAMA) to maintain monetary stability and confirm SAMA’s commitment to continuing to develop the digital payments infrastructure in the Kingdom.

Among the most prominent decisions taken by the Central Bank during the year 2024 were the issuance of the “Electronic Wallets Rules”, the launch of the government banking services platform “Naqd”, the launch of the “Samsung Pay” service, in addition to the commencement of Dal 360 Bank’s banking operations in the Kingdom.

By the end of the year, inflation rates had calmed down enough to help most advanced economies begin easing their monetary policies, by making decisions on interest rates, most notably the Federal Reserve’s decision.

The Saudi Central Bank was not isolated from global developments regarding reducing interest rates during 2024, due to the Saudi riyal being linked to the US dollar; as the Saudi Central Bank reduced interest rates 3 times throughout the year from 5.50% to 5%.

Mubasher monitors the most important decisions and amendments of the Saudi Central Bank and the development of interest rates since the beginning of this year:

3 interest rate cuts in 2024

On September 18, the central bank decided to cut the repo rate by 50 basis points to 5.50%, and the reverse repo rate by 50 basis points to 5%.
In line with its goal of maintaining monetary stability, the Saudi Central Bank decided on November 7 to reduce the repo rate by 25 basis points to 5.25%, and reduced the reverse repo rate by 25 basis points to 4.75%. The third interest rate cut came on December 18. The Saudi Central Bank decided to reduce the repo rate by 25 basis points to 5%, and reduced the reverse repo rate by 25 basis points to 4.50%.

The Central Bank explained that this comes in light of global developments, and in line with the Central Bank's goal of maintaining monetary stability.

Launching the "Draft General Rules for Savings Products in Banks and Financial Institutions"

On January 10, the Central Bank announced the launch of the “Draft General Rules for Savings Products in Banks and Financial Institutions” project to request public comments from interested parties and specialists, through the “Istithlaa” platform of the National Competitiveness Center.

This project aims to create a general framework for savings products offered by banks, which contributes to encouraging banks to offer savings products and stimulate customers to benefit from them, in addition to encouraging and enabling financial planning in society.

Launch of the "Draft Rules for the Evaluation of Important Financial Institutions"

On February 20, the Saudi Central Bank (SAMA) announced the launch of the “Draft Rules for Evaluating Important Financial Institutions” project to request public feedback from interested parties and specialists, through the “Istithlaa” platform of the National Competitiveness Center, in line with the objectives and roles of the Saudi Central Bank in supporting the stability of the financial sector, enhancing confidence in it, and supporting economic growth.

Launching the "Draft Rules for Opening Electronic Wallets"

On May 15, the Saudi Central Bank (SAMA) announced the launch of the “Draft Rules for Opening Electronic Wallets” project to request public feedback from interested parties and specialists, through the “Istithlaa” platform of the National Competitiveness Center.

This step comes from the Saudi Central Bank’s supervisory and regulatory role, and as an affirmation of the follow-up of compliance with the relevant regulations and instructions as an initiative by “SAMA”, in which a number of regulatory requirements were specified for licensed electronic money companies when opening electronic wallets for customers, which must be adhered to in order to protect those dealing in the sector, and to support service providers to improve their services, which contributes to enhancing the safety and stability of this activity.

The number of e-money companies licensed to provide e-wallets currently stands at 11. The total number of e-wallets in the Kingdom has exceeded 21 million.

Introducing the updated “Rules for Practicing Debt Crowdfunding Activity”

On May 22, the Saudi Central Bank (SAMA) announced the launch of a project to update the “Rules for Practicing Crowdfunding Activities with Debt” to request public feedback from interested parties and specialists, through the “Istithlaa” platform of the National Competitiveness Center.

These updates come from the Saudi Central Bank’s supervisory and regulatory role over debt crowdfunding facilities, and its ongoing efforts to develop the finance sector in general, and empower the financial technology sector in particular.

The updated rules will contribute to supporting debt crowdfunding activity by enabling beneficiary establishments to obtain financing amounts commensurate with their size and nature of activity, and enhancing disclosure requirements. These updates also aim to grow and sustain the activity, while taking into account the rights of participants in debt crowdfunding activity.

Draft principles of “Internal Audit” and “Compliance” for finance companies launched

On May 26, the Saudi Central Bank (SAMA) announced the launch of the “Draft Principles of Internal Audit for Finance Companies” and “Draft Principles of Compliance for Finance Companies” projects to request public comments from interested parties and specialists, through the “Istithlaa” platform of the National Competitiveness Center.

These projects come from the Saudi Central Bank’s supervisory and regulatory role over the finance sector, and its continuous efforts to support the stability and development of the sector.

These principles aim to establish a comprehensive regulatory framework that contributes to defining the tasks of the main units in finance companies, and clarifying the roles of the board of directors and executive management towards these units, taking into account the best international standards recognized in this regard in a manner that is consistent with the size of the company and the nature of its business.

Launch of the "Draft Banking Tariff Guide"

On May 30, the Saudi Central Bank (SAMA) announced the launch of the “Draft Banking Tariff Guide” project to request public feedback from interested parties and specialists, through the “Istithlaa” platform of the National Competitiveness Center.

This project aims to enable and support individual customers and small and medium enterprises to obtain banking services and products with ease and convenience, by setting general provisions that banks must adhere to when determining fees for banking services and products, and determining the maximum fees for basic banking services for individual customers that banks can collect, in addition to the standards that must be taken into account when determining fees for all banking services and products provided to individual and legal persons.

Join the mBridge CBDC project for financial institutions

On June 5, SAMA announced that it had joined the Bank for International Settlements’ mBridge project to test a minimum viable product (MVP) for central bank digital currencies.

This project is the first cross-border payments system using central bank digital currencies for financial institutions to reach this advanced stage of development.
It is worth noting that the G20, under the presidency of the Kingdom of Saudi Arabia, in October 2020, agreed on a roadmap to enhance global cross-border payments to make payments faster, less expensive, more inclusive and more transparent.

The roadmap called for an evaluation of proposed local designs for digital currency from several central banks, and for experiments on the extent to which they could be used to settle cross-border payments.
Launching the government banking services platform "Naqd"

On July 14, the Saudi Central Bank (SAMA) announced the launch of the government banking services platform “Naqd”, which allows government agencies to access their accounts with the Central Bank easily and conveniently, in addition to conducting financial transactions on a secure digital platform.

This step comes within the framework of the Central Bank’s strategy to provide banking services to government agencies and support digital development.

It contributes to digitizing the financial operations services of government agencies on their accounts with the Saudi Central Bank, under a unified and secure digital platform, and also facilitates access to their account information around the clock, and the management of these accounts, in addition to immediate follow-up of the operations carried out to and from the accounts of government agencies.

The platform aims to provide electronic banking services that support government financial transactions, enhancing the user experience and raising the level of efficiency and productivity in financial transactions using the latest technologies, and contributing to reducing the time required to implement government banking procedures.

Release of the second version of the Open Banking Framework

On September 2, the Saudi Central Bank (SAMA) issued the second version of the Open Banking Framework, which focuses on the payment origination service, as part of the central bank’s efforts to enhance the financial technology system in the Kingdom, with the aim of improving the customer experience, raising the efficiency of transactions, in addition to providing new opportunities in the sector to provide expanded products and solutions to customers.

The Open Banking Framework includes a set of technical instructions and standards in accordance with international best practices to enable banks and fintech companies to provide open banking services in the Kingdom.

The payment creation service allows individual and institutional fintech customers to create payments directly from their bank accounts to beneficiaries’ accounts in a secure manner. This service will enable customers to better manage their bank accounts and provide them with multiple and innovative options to conduct their financial transactions.

Launching the “View My Bank Accounts” service for individual customers

On September 5, the Saudi Central Bank (SAMA) launched the “View My Bank Accounts” service for individual customers at local banks.

The new service allows individuals to verify ownership of personal accounts with local banks, by making them available through the electronic channels of those banks.

Issuance of “Compliance” and “Internal Audit” Principles for Finance Companies and Real Estate Refinance Companies

On October 2, the Saudi Central Bank (SAMA) announced the issuance of “Compliance Principles” and “Internal Audit Principles” for finance companies and real estate refinance companies, based on its supervisory and regulatory role over the finance sector, and its ongoing efforts to develop the sector.

These principles were established to establish a comprehensive regulatory framework that contributes to defining the tasks of the main units in finance companies and real estate refinancing companies, and clarifying the roles of the Board of Directors and Executive Management towards the Compliance Unit and the Internal Audit Department; in accordance with the best standards in this regard, taking into account the size of the company and the nature of its business.

Issuance of updated rules for practicing debt crowdfunding activity

On October 17, the Saudi Central Bank (SAMA) announced the issuance of the updated “Rules for Practicing Debt Crowdfunding Activity,” based on its supervisory and regulatory role over debt crowdfunding companies, and its ongoing efforts to develop the finance sector in general, and empower the financial technology sector in particular.

The rules included a number of updates, most notably: setting additional disclosure requirements, including the obligation for debt crowdfunding companies to disclose default rates through their platform, and allowing debt crowdfunding companies to participate in financing beneficiary establishments in accordance with the controls specified in the rules, in addition to allowing debt crowdfunding companies to finance beneficiary establishments with amounts exceeding 7.5 million riyals when financing large commercial establishments and establishments licensed to practice real estate development activity, or in the event of obtaining a written non-objection from the Central Bank.

The adoption of these updates comes after the Central Bank had previously presented the updated draft of the “Rules for Practicing Crowdfunding Activities with Debt” to survey the views and comments of the public and specialists regarding it; in order to enhance the principle of transparency and participation. The comments and views were studied and taken into consideration in the final version of the rules.

Update on “Collection Controls and Procedures for Individual Customers”

On October 27, the Central Bank announced the launch of a project to update the “Controls and Procedures for Collection for Individual Customers” to request public feedback from interested parties and specialists, through the “Istithlaa” platform of the National Competitiveness Center.
This project aims to improve and organize the mechanism for collecting customer debts and communicating with them in this regard in a way that protects the rights of the parties to the relationship.

Issuance of "Electronic Wallet Rules"

On November 13, the Saudi Central Bank (SAMA) announced the issuance of e-wallets rules, based on its regulatory and supervisory role over e-money companies licensed to provide e-wallets services, and in line with SAMA’s ongoing efforts to develop the payments sector in the Kingdom, by establishing regulatory and supervisory frameworks that enhance the role of the Central Bank in protecting the safety and stability of the financial sector, and protecting the rights of those dealing in this important activity.

The e-wallet rules aim to define the relevant regulatory requirements that must be adhered to by licensed e-money companies; to protect those dealing in the payments sector. The rules include a set of provisions and obligations, including regulatory provisions related to determining the minimum controls necessary when identifying and verifying the customer’s identity, and confirming compliance with the relevant instructions and rules.

Samsung Pay Launched

On December 9, the Saudi Central Bank (SAMA) announced the launch of the “Samsung Pay” payment service through the national payment system “Mada” in the Kingdom; to enhance the digital payments system in the Kingdom, which is in line with Saudi Vision 2030.

It is noteworthy that the Saudi Central Bank "SAMA" announced on September 3 the signing of an agreement with Samsung to make the "Samsung Pay" service available in the Kingdom during the fourth quarter of 2024 AD, on the sidelines of the 24 Fintech Conference held in Riyadh.

The service aims to provide an advanced and secure payment experience for users, enabling them to add and manage Mada cards and digital credit cards easily and securely via the Samsung Wallet application, as part of the Saudi Central Bank’s strategy to expand the scope of using financial technology solutions via smart devices, enhance financial inclusion in the Kingdom, and stimulate the financial sector to serve customers through the latest payment methods.

Dal 360 Bank starts its banking operations in the Kingdom

On December 17, the Saudi Central Bank (SAMA) announced that it had no objection to D360 Bank starting its banking operations in the Kingdom, which is one of three local digital banks licensed in the Kingdom.

This step comes within the framework of SAMA's objectives aimed at supporting the stability of the financial sector and enhancing confidence in it, and supporting economic growth and competition in the banking sector, in a way that reflects the strength, durability and attractiveness of the banking sector in particular, and the Saudi economy in general.

The Central Bank continues its efforts to enhance the strength, durability and attractiveness of the banking sector, and increase its contributions to achieving Saudi Vision 2030 and supporting national targets, in line with enhancing the principle of financial inclusion, enabling financial institutions to support the growth of the private sector, and opening the way for new companies to provide financial services.