Consortium of companies to establish Saudi digital bank

Consortium of companies to establish Saudi digital bank

One of the companies listed in the Saudi stock market announced that it would be a founding shareholder; as part of a consortium of several commercial entities to establish a digital bank in Saudi Arabia. The new bank’s operations will be compatible with the Islamic Shariah regulations.

The proposed digital bank will be considered effective only after securing approval from all the competent official agencies; the company sources said.

It is noteworthy that the Saudi Central Bank, the then Saudi Arabian Monetary Authority; issued in February 2020 additional licensing guidelines and criteria to establish digital-only banks in the Kingdom.

Digital-only banks conduct business mainly through digital channels such as the Internet and mobile applications. The guidelines are applicable to digital-only banks and are cumulative to the central bank’s Banking Licensing Guidelines and Minimum Criteria published on its website.

The issuance of the guidelines is in line with Saudi Arabia’s efforts to build out a regulatory framework. Besides, promoting the growth of an innovation-based financial technology ecosystem.

The guidelines establish a licensing avenue of startup fintech-based banks that witness growth in other markets. Last year, the central bank also reviewed two new applicants for the process of granting them digital banking licenses.