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

RIYADH: As Saudi Arabia pursues its Vision 2030 goals, the Kingdom’s central bank is playing a leading role by implementing a number of key initiatives and giving the green light to various enterprises in 2024. These actions reaffirm the country’s commitment to supporting financial innovation and social inclusion.

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

Additionally, it issued licenses to enhance payment services and crowdfunding, strengthening its key role in the Kingdom’s economic diversification.

Here are some of the notable events and initiatives undertaken by SAMA this year:

Increasing security and accessibility

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

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

Dealing with macro-financial challenges

In April, the top bank convened a high-level meeting on reserve management, which focused on the complexity of the current macrofinancial environment. The event brought together reserve managers and experts from central banks from across the Middle East and North Africa region, as well as participants from other leading financial institutions, to learn about the latest trends in foreign exchange reserve management.

SAMA Governor Ayman Al-Sayari emphasized that the evolving global landscape creates new challenges and opportunities for central bank reserve managers. He stressed the importance of such high-level meetings in dealing with the complexity of the current macro-financial environment.

Investment immersion program

In another development, the Saudi Central Bank launched the registration process in April for the fourth edition of the Investment Immersion program, which aims to support and employ local investment professionals.

Developed in partnership with the Wharton School of the University of Pennsylvania, together with major global banks and asset managers, this program offers a comprehensive curriculum that includes academic courses and hands-on training in a variety of investment areas.

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

Additionally, participants will benefit from continuous development programs aimed at improving their technical investment skills, as well as a number of specific employee benefits.

The program is open to Saudi citizens under the age of 27 who hold a bachelor’s or master’s degree in finance, accounting, economics, statistics or business-related fields from national or accredited international universities.

Controlling financial stability

In February, the central bank, represented by Governor SAMA Al-Sayari, co-chaired the Regional Consultative Group of the Financial Stability Board at the MENA meeting in Riyad.

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 vulnerabilities in global and regional financial stability, including the implementation of a global regulatory framework for cryptocurrency activities.

Additionally, the meeting examined lessons learned from the turmoil that hit the global banking sector in 2023, as well as financial risks arising from the high interest rate environment and non-bank financial intermediation.

Al-Sayari highlighted the MENA region’s emergence as a global development hub, driven by its strategic location and continued economic diversification efforts. He also highlighted the International Monetary Fund’s finding 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 adapting to economic and financial conditions in the region, supporting the interconnectedness of its economies.

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

The FSB Regional Advisory Group for the MENA region includes financial and regulatory authorities from Saudi Arabia, Kuwait and the United Arab Emirates, as well as Bahrain, Oman and Qatar. Additionally, it covers Egypt, Algeria and Jordan, as well as Lebanon, Morocco, Tunisia and Turkiye.

Supporting financial innovation

Throughout the year, the central bank actively licensed various payment and crowdfunding service providers.

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

OVERVIEW OF THE MOST IMPORTANT EVENTS

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

• SAMA Governor Ayman Al-Sayari stressed the importance of developing plans to support financial stability while adapting to economic and financial conditions in the region, supporting the interconnectedness of its economies.

“This decision reflects SAMA’s efforts 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 working only with authorized financial institutions,” the top financial institution said.

In February, the central bank granted Alpha Arabia Finance Co. permits to conduct business activities in the field of financing small and medium-sized enterprises.

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

Sohar International receives the SAMA nod

In January, Sohar International, Oman’s second-largest bank, received a no-objection certificate from SAMA for its planned expansion into Saudi Arabia.

This strategic move is in line with the bank’s growth strategy and demonstrates its ability to identify sustainable development opportunities.

The bank’s entry into the Saudi market is expected to help Omani corporations looking to enter the kingdom’s market.

“At the heart of the bank’s strategic expansion is a synthesis of personalized, customer-focused offers and avant-garde services. They are a pillar of the bank’s overarching strategy to not only grow, but also to sustainably improve customer service in an ever-changing financial landscape,” said Ahmed Al-Musalmi, CEO of Sohar International.

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

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