Saudi Arabia offers 5th round of ‘Sah’ savings product with 5.55% return 

RIYADH: As Saudi Arabia moves forward with its Vision 2030 goals, the Kingdom’s central bank is leading the way, spearheading a number of key initiatives and greenlighting various ventures in 2024. These actions reaffirm the nation’s commitment to promoting financial innovation and inclusion.

The Saudi Central Bank, known as SAMA, has launched a wave of programs and approvals this year, from introducing secure account services to engaging in high-level discussions on reserve management and expanding investment formation efforts.

In addition, it issued licenses to strengthen payment and crowdfunding services, reinforcing its key role in the Kingdom’s economic diversification.

Here are some of the significant developments and initiatives undertaken by SAMA this year:

Increasing security and accessibility

In May, SAMA announced the launch of a new initiative called “View My Bank Accounts” for individual bank account holders. The new service aims to increase reliability and reduce the risks of suspicious transactions, unauthorized account use and identity theft.

SAMA added that it is continuously working to develop electronic financial transactions in line with international best practices.

Navigating macro-financial challenges

In April, the apex bank convened a high-level meeting on reserve management, addressing the complexities of the current macro-financial environment. The event brought together reserve managers and central bank experts from the Middle East and North Africa region, along with participants from other leading financial institutions, to delve into the latest trends in foreign exchange reserve management.

SAMA Governor Ayman Al-Sayari highlighted how the evolving global landscape introduces new challenges and opportunities for central bank reserve managers. He emphasized the importance of such high-level meetings in navigating the complexities of the current macro-financial environment.

Investment Immersion Program

In another development, the Saudi Central Bank initiated the registration process for the fourth edition of the Investment Immersion Program in April, aimed at cultivating and engaging local investment professionals.

Developed in collaboration with the Wharton School of the University of Pennsylvania, along with leading global banks and asset managers, this program offers a comprehensive curriculum that includes academic courses and practical training in various investment areas.

“The program offers an advanced technical course, on-the-job training with international banks and asset management companies, and job rotation as an investment deputy at the Saudi Central Bank under the supervision of experts in asset management and global financial markets .” SAMA said.

In addition, participants will benefit from continuous development programs aimed at improving their technical investment skills, as well as a number of distinctive employment benefits.

The program is designed for Saudi nationals under the age of 27 who hold bachelor’s or master’s degrees in finance, accounting, economics, statistics or business-related fields from either national universities or accredited international universities.

Driving financial stability

In February, the central bank, represented by Governor SAMA Al-Sayari, co-chaired the Financial Stability Board’s Regional Advisory Group for the MENA meeting in Riyadh.

Also present were Hassan Abdulla, Governor of the Central Bank of Egypt, and Klaas Knot, Chairman of the Financial Stability Board.

Discussions during the meeting focused on challenges related to global and regional financial stability vulnerabilities, including the implementation of the global regulatory framework for crypto-asset activities.

In addition, the meeting discussed the lessons learned from the turbulence affecting the global banking sector in 2023, along with the financial risks arising from the high interest rate environment and non-bank financial intermediation.

Al-Sayari highlighted the emergence of the MENA region as a global center for development, driven by its strategic location and continued economic diversification efforts. He also highlighted the International Monetary Fund’s assertion in its Regional Economic Outlook that MENA is resilient to adverse macro-financial risk scenarios.

Al-Sayari stressed the importance of developing plans to support financial stability while being aligned with the economic and financial conditions of the region, encouraging the interrelationship of its economies.

Members also received an update on the FSB’s work program for 2024 and discussed the FSB’s initial lessons learned from the 2023 banking turmoil report.

The FSB’s Regional Advisory Group for the MENA region includes financial and regulatory authorities from Saudi Arabia, Kuwait and the United Arab Emirates, along with Bahrain, Oman and Qatar. In addition, it includes Egypt, Algeria and Jordan, as well as Lebanon, Morocco, Tunisia and Turkey.

Stimulating financial innovation

Throughout the year, the central bank has been proactive in licensing various payment and crowdfunding service providers.

It started the year by authorizing Thara to offer debt-based crowdfunding solutions. At the same time, SAMA also granted licenses to Network International Arabia for point-of-sale payment services and Barraq for e-wallet services.

REVEALED

• The Saudi Central Bank, known as SAMA, has launched a wave of programs and approvals this year, from introducing secure account services to engaging in high-level discussions on reserve management and expanding investment formation efforts.

• The Governor of SAMA, Ayman Al-Sayari, emphasized the importance of developing plans that support financial stability, at the same time aligned with the economic and financial conditions of the region, encouraging the interrelationship between its economies.

“This decision reflects SAMA’s effort to support the financial sector, increase the efficiency of financial transactions and promote innovative financial solutions for financial inclusion in Saudi Arabia. SAMA emphasizes the importance of dealing exclusively with authorized financial institutions,” the apex financial institution said.

In February, the central bank extended the authorization of Alpha Arabia Finance Co. to engage in financing activities for small and medium-sized enterprises.

In April, SAMA licensed Funding Souq to offer debt-based crowdfunding solutions, bringing the total number of such companies operating in the Kingdom to 10.

Sohar International receives SAMA’s nod

In January, Sohar International, Oman’s second-largest bank, received a no-objection certificate from SAMA as it set its sights on expanding into Saudi Arabia.

This strategic move aligns with the bank’s growth strategy, demonstrating its ability to identify opportunities for sustainable expansion.

It is anticipated that the bank’s entry into the Saudi market will help Omani corporations looking to enter the Kingdom’s market.

“At the core of the bank’s strategic expansion is a synthesis of personalized, customer-oriented offers and avant-garde services. They form the pivot of the bank’s global strategy, aiming not only to grow but also to sustainably improve the customer experience in an ever-evolving financial landscape,” said Ahmed Al-Musalmi, CEO of Sohar International.

Overall, SAMA’s proactive measures underline its commitment to supporting Saudi Arabia’s economic growth and resilience in an ever-evolving global financial landscape.

Leave a Comment