The Saudi Central Bank (Sama), said in a statement that the Cabinet’s decision to approve the licensing of two local digital banks will be by converting the Saudi Digital Payments Company (STC Pay) to become a local digital bank to conduct banking business in the Kingdom with a capital of 2.5 billion riyals (S Bank TC), and a number of companies and investors, led by Abdulrahman bin Saad Al-Rashed & Sons, joined forces to establish a local digital bank to conduct banking business in the Kingdom, with a capital of 1.5 billion riyals (the Saudi Digital Bank).
STC said, in a statement on the Saudi Stock Exchange “Tadawul”, today, Wednesday, that the approval of granting the license requires the completion of all legal requirements specified by the Saudi Central Bank and the competent authorities, so that STC pumps an amount of 802 million Saudi riyals to retain 85% From the capital of stc pay, the Western Union Company (through a wholly owned subsidiary) invests 750 million Saudi riyals to own 15% of the capital of stc pay, which will raise the total capital to 2.5 billion Saudi riyals.
In a statement from the Saudi Central Bank, Finance Minister Mohammed Al-Jadaan stated that the council’s approval reflects the leadership’s keenness to keep pace with the rapid development in “financial technology” and to enable the Kingdom of Saudi Arabia to be among the largest financial centers in the world, through its full support for the financial sector development program, one of the most prominent Programs to achieve the Kingdom’s Vision 2030 aimed at keeping pace with global developments in this sector, and achieving qualitative leaps in the field of financial services that keep pace with the continuous development in business and services in the Kingdom.
He pointed out that the Financial Sector Development Program worked on developing a strategy for the sector during the period from 2021 AD to 2025 AD, which includes a number of initiatives related to financial technology that will develop the sector, support the development of the national economy and diversify its sources of income.
For his part, the Governor of the Central Bank clarified that with the approval of the Council of Ministers, the Central Bank will work to complete the necessary technical and operational requirements; The two banks began practicing their business in the Kingdom, stressing in this regard that digital banks will be subject to all supervision and control requirements applicable to banks operating in the Kingdom, emphasizing technical aspects, cybersecurity, combating money laundering, terrorist financing and operational risks.
Al Mubarak indicated that digital banks will provide financial products and services exclusively through digital channels. Through an innovative banking business model for the sectors, which contributes to the rise of financial inclusion. Digital banks aim to keep pace with the latest developments in the global financial and technical sector.
It is worth noting that the Saudi Central Bank is making unremitting efforts to support innovation in the financial sector to develop the digital economy and enable financial companies to support the growth of the private sector and open the way for new companies to provide financial services to individuals. And consumer microfinance and electronic insurance brokerage, as stated by the Central Bank of 32 financial technology companies, which are currently operating under the umbrella of the legislative experimental environment dedicated to experimenting with innovative financial services and products in the Kingdom.
In the context of seeking to enhance the readiness of the technical infrastructure of the financial sector; To enable it to benefit from the most prominent financial technologies by ensuring the achievement of the best regulatory standards for new and innovative services and technologies, the Central Bank issued an “open banking policy” last year, which will enable bank customers to manage their bank accounts and share data securely, as customers will allow the third party From service providers, including local banks and financial technology companies, to access their banking information through the customer’s explicit consent to that, and the Central Bank is constantly working on developing, developing and supporting the banking sector through innovation and creating opportunities for financial technology companies and keeping pace with that with legislation and maintaining The Kingdom’s gains in maintaining economic stability and the strength of the financial sector.