Riyadh, SPA: The Saudi Central Bank (SAMA) seeks public consultation on the draft Banking Law. To promote transparency and participation, SAMA has invited the public and stakeholders to share their views and comments on the draft law through National Competitiveness Center’s Public Consultation Platform.
Based on the mandates stipulated in its Law, SAMA prepared the draft law to keep abreast of the latest developments in the banking sector. This is to ensure stability and growth of the banking sector, encourage investment in the sector, contribute to financial stability in the Kingdom, and promote the protection of depositors and consumers.
SAMA noted that the draft law comes as a result of its ongoing internal evaluations and out of its keenness to align with the legislative developments of the countries benchmarked to benefit from when the provisions of the law were made. The draft law also was developed in accordance with the recommendations issued by relevant international organizations. Moreover, SAMA indicated that the draft law is expected to continue regulating the banking sector effectively just as the current Banking Control Law does.
The highlights of the draft law include:
· Expanding the definition of banking business to explicitly cover credit granting in a separate article due to its importance.
· Determining precisely the objectives and scope of the law.
· Expanding the scope of the law to include practicing banking business by persons outside the Kingdom to persons resident inside the Kingdom as determined by SAMA, mainly to ensure consumer protection.
·Enhancing the legal framework of the Deposit Protection Fund, under which the Fund compensates depositors according to the announced protection limit when required, to protect depositors and contribute to financial stability.
· Enhancing banking secrecy framework in the Kingdom through the application of secrecy obligation as a general rule with a number of limited exceptional cases, which will be precisely defined in the legal framework.
· Establishing a legal framework to regulate financial technology in the banking sector under general and special provisions covering digital banking, open banking, RegTech, big data…etc.
· Updating violations, crimes, and penalties framework.
Finally, the public consultation on the draft law will be open for (30) days. All views and comments will be subject to assessment and consideration to submit the final draft to the regulatory authority. The draft law is available on the National Competitiveness Center’s Public Consultation Platform.
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