SAMA bans banks from opening accounts for suspicious parties

Monday 7 February 2022 14:41 CET | News

The Saudi Central Bank (SAMA) has banned Saudi local banks from allowing the opening of accounts by entities that are involved in illegal operations.

The Central Bank also instructed that banks shall notify customers about freezing of their accounts at least 30 days before the date of freezing. These rules are contained in the updated Bank Account Rules that are mandatory and to be enforced by the Saudi banks effective from 2 February 2022.

These rules replace the fourth update of the rules for opening bank accounts and the general rules for their operation in commercial banks operating in the Kingdom. The updated rules would allow banks to carry out transactions of outgoing remittances and sold checks only by customers who are accountholders.

The rules prohibit banks from opening bank accounts for investment companies, investment funds, foreign financial institutions, including investment companies in the Gulf countries or their intermediaries that sell their products illegally in the Kingdom and collect money in Saudi riyals and foreign currencies.

Saudi banks are also not allowed to facilitate such illegal businesses in any way whatsoever. However, there are exemptions for the categories of entities that the Saudi Capital Market Authority allowed to invest in shares of Saudi joint stock companies.

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Keywords: central bank, regulation, money laundering, KYC
Categories: Banking & Fintech
Countries: Saudi Arabia
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