Chapter II. Supervisory Rules and Controls
1. Electronic Record
For the purpose of setting up a unified electronic database for bank accounts, all banks shall establish an electronic registration system in accordance with the classification set forth in Appendix (C) and its updates and based on the information provided in the approved IDs. This system serves as an electronic record, and should include the requirements provided in the paragraphs below as well as the detailed requirements provided in Chapters III and IV herein, as a basis for opening, operating, and following up bank accounts.
1.1 Saudi Natural Persons
- Banks must have in place an electronic record for all Saudi nationals having, as a minimum, the following:
a. The full name (first, second, third and family name) as shown in the ID.
b. ID number.
c. ID expiry date.
d. National address and contact information.
e. Employer (if any).
- Information used shall be based on the national ID, family register for minors, or birth certificate for people of special circumstances staying at housing centers of the Ministry of Human Resources and Social Development and shall be obtained from reliable sources.
1.2 GCC Natural Persons
- Banks must maintain an electronic record for all GCC nationals having, as a minimum, the following:
a. The full name as shown in the national ID.
b. National ID number.
c. National ID expiration date.
d. Nationality.
e. Address and contact information.
f. employer (if any).
- Information shall be obtained from the national ID and from reliable sources.
1.3 Non-Saudi Natural Persons
- Banks must maintain an electronic record for all non-Saudi natural persons having, as a minimum, the following:
a. The full name as in the passport or Iqama and in the same language according to the following priority (Arabic - English- Latin alphabets). If the name is in any other language, the name provided in the entry visa granted by Saudi embassies and consulates should be used.
b. Nationality.
c. Iqama No. and validity date.
d. National address and contact information.
e. Employer (if any).
- For persons holding Iqama cards with five-year validity period that is given to some tribe members, the full name, number and validity date of the card shall be written.
- No accounts may be opened for expatriates holding Saudi passports except with the approval of the Ministry of Interior through SAMA.
1.4 Juristic Persons
- Banks must maintain an electronic record for all juristic persons having, as a minimum, the following:
a. The official full name of the juristic person as per official documents.
b. Commercial register number or license number if the activity does not require a CR, (if the account is opened for the main commercial register, the main commercial register number shall be written. However, it the account is opened for a subsidiary commercial register, the subsidiary commercial register number shall be written. The main commercial register accounts shall be electronically linked with the subsidiary commercial register accounts).
c. The ID numbers of the owners as indicated in the last update of memorandum of association and persons authorized to manage the accounts (owners of joint stock companies are exempted from providing their ID numbers).
d. Signature of the person authorized to manage the account.
e. The national address of the juristic person.
f. Tax No. (if any).
g. Legal Entity Identifier (if any).
- For accounts opened pursuant to official approvals or applications, the reference number, date and name of body issuing such approval or making such application shall be recorded.
2. Requirements for Inspection Purposes
Banks shall use an electronic search system to perform the routine search according to information required in the electronic records under each category. Such search shall cover all transactions, relationships, products and services offered to customers in addition to express transfers and investment deposits.
3. Freezing of Bank Accounts Upon Expiration of Identification Documents
3.1 Freezing of Bank Accounts
As a rule between banks and customers, the relationship must start and continue under valid identification documents and IDs for all transactions, whether those covered by the definition of bank account in Chapter I or other contractual relations or account-related services.
3.1.1 Saudi Natural Persons
Banks must freeze all accounts held by Saudi natural persons upon the expiration of the documents provided below unless the account holder presents a renewed document or a valid ID card. A bank may verify ID renewal without requiring the customer attendance via trusted and independent source and it shall document that. The following are the documents to be presented by Saudi customers prior to opening or maintaining a bank account:
- National ID Card: The account opened by an ID card shall be frozen after the elapse of (90) days from expiry date and shall not be reactivated except after renewal.
- Family Register for Minors: An account opened for a minor under a family register shall be frozen upon the elapse of five years from the account opening date or five years from last account update. Presence of the minor is not required as the presence of his/her guardian or curator will suffice. The bank shall inform the guardian or curator, (90) calendar days prior to the minor reaching the age of (15) Hijri years, to update such account and present a valid national ID of the minor.
- Birth Certificate of Children of Special Circumstances: The account must be frozen when the minor reaches the age of (15) Hijri years and may be reactivated when he/she is issued a valid ID card or when a letter is received from the Ministry of Human Resources and Social Development requesting continuation of the account until the minor reaches (18) Hijri years.
3.1.2 Non-Saudi Natural Persons
Banks shall freeze all accounts and transactions of all non-Saudi natural persons after (90) days of the expiration of the documents mentioned below. After (180) days of the expiration of the ID, the account balance shall be transferred to an unified account created by the bank for such cases. After 5 years from the date of last transaction/dealing carried out by the customer in his/her account, the balance shall be transferred to the suspense account created for unclaimed accounts and all outstanding obligations of the customer during and after this period shall be met. Also, all accounts of expatriates must be closed upon their final exit. The documents are as follows:
- National ID Card for GCC citizens.
- Iqama for expatriates.
- Diplomatic card for diplomats.
3.1.3 Juristic Persons
All banks must:
- Freeze all accounts of juristic entities after (90) days from the expiration date of the respective authorization to practice their activity (license, commercial registration, etc.) unless the customer provides a renewed authorization or any document valid for (90) days from a the responsible authority proving that it is being renewed.
- Freeze all accounts of juristic persons and organizations whose documents of opening their accounts do not contain a validity date, such as the accounts of charity and welfare societies or organizations, government accounts and licensed schools and the like upon the lapse of five years from the date of opening the account or the date of last update to the account until the account data is updated.
- Freeze the relationship with correspondent banks upon the end of the period specified in Rule (4) and until all requirements of KYC and AML/CFT are fulfilled.
- Monitor the ID validity of the directors and authorized signatories of juristic person accounts and freeze and suspend their powers to operate the account only, depending if they are Saudis or non-Saudis, until the renewal of IDs. This shall also be applicable to sole proprietorship owners.
3.2 General Instructions for Freezing of Bank Accounts
- The bank must ensure that the account opening agreement, contractual relationships and services state that the bank has the right to freeze the account upon the expiration of the customer’s ID and/or when the customer does not update his/her personal and financial data and addresses.
- The bank must notify the customer of the account freezing date at least (30) days in advance, and must have adequate processes in place to ensure the same with respect to each customer or authorized person acting on his behalf and such processes should be documented.
- A joint account with a single or joint signature must be frozen upon the expiration of the ID card of either of the account holders.
- Freezing order issued due to the expiry of identification documents other than the national ID may be lifted upon presentation of a valid national ID. However, banks shall not lift freezing order on accounts opened by a national ID if other identification document is presented.
- Natural or juristic persons shall have the right to close their own accounts or any accounts they are authorized to operate (only single transaction) that are frozen due to the expiry of IDs or failure to update their data, provided that the customer completes a form prepared by the bank for this purpose and that the procedures stated in account closure instructions are applied.
- If the request to freeze the account of an expatriate is made after his final exit from Saudi Arabia, and if the account balance is less than SAR (50,000), banks may transfer the money to the owner with the approval of the bank's compliance department, according to procedures set by the bank depending on the customers, their countries and signature checks. However, if the account balance is over SAR (50,000), the money shall only be transferred to the owner upon a request approved by the correspondent bank of the local bank or the branch of the resident foreign bank. Banks are not allowed to transfer only part of the balance. The balance shall only be transferred abroad to the account holder or the legal agent of his/her heirs upon the approval of the compliance department.
- In case an expatriate customer requests the bank to transfer the balance of his/her account immediately after his/her previous final exit and presents a visa other than the work visa, the balance exceeding SAR (50,000) may only be paid upon the approval of the compliance department after evaluating the account. If such a customer directly applies to the bank and submits a new Iqama issued under the same passport or a new passport, the frozen account shall be closed if it is still within the freezing duration, before (180) days, and a new account shall be opened for him/her and the amount shall be transferred to the new account, and thereafter he/she shall be allowed to deal on such account.
3.3 Freezing Exceptions
Banks shall not allow a customer or its authorized person to carry out transactions from his/her accounts after the expiration of his/her ID, unless upon renewal thereof or updating his/her KYC data. The following shall be exempted from freezing:
- Personal deposits or deposits received through clearing and local and international transfers, SARIE payments/ collections and salaries of employees.
- The customer existing obligations already effected by the bank with or on behalf of the customer in favor of the bank or third parties (government or non-government) before the expiration of the ID of account holder or authorized representative. Such obligations include, but are not limited to, payment of credit cards, loans, direct debit payments, standing regular instructions for payments such as payment of utility bills, letters of credit and letters of guarantee etc. These also include high risk investment transactions due to price fluctuations that are likely to inflict damages to the customer, in which case the customer would be called upon by a bank officer and given a maximum period of (60) days from the date of executing the transaction to have his ID renewed.
- Standing instructions governing Saudi account not related to outstanding obligations are allowed to continue after the freezing of the account subject to the approval of the operation manager at the bank's Head Office, for a limited number of times and for a maximum period of (180) days as of the ID's expiry date. The bank should lay down the procedures and the policies which ensure control and activation of these cases in terms of limits and number of times.
- Accounts of Saudi (male and female) diplomats, students on scholarship abroad, patients with chronic diseases staying at hospitals or other places and their accompanying family members, prisoners and the like, soon after the bank becomes aware of them, in which case they may be given (180) days from the date of expiration of ID for unlimited number of times after obtaining the approval of the bank’s compliance department manager. In order to extend the period specified, an approval from the bank’s CEO/general manager and the compliance department must be obtained. Banks shall contact their customers using the preferred method of contact according to their files or the procedures banks deem appropriate to encourage customers to renew their IDs.
- For the accounts of the State employees whose salaries are delivered through banks and whose accounts are frozen and are not able to present national IDs because of certain formality problem in respect therewith, they shall be allowed a 180 days' delay period after the date of expiration of their identification documents or updating due date, after presenting the official employment card or an official reference letter.
4. Updating Account Data
Customer identification must be established at the outset of relationship. As a measure of control, banks must require all their customers to update the database of their accounts with the bank according to the cases and the periods provided in these Rules. The updating process must include the customer ID, personal information, national address, financial information including personal information of the customer’s authorized representatives/agents and information of the beneficiary of legal persons. Banks shall establish permanent procedures and policies for the updating process which shall be carried out as follows:
4.1 Updating the Customer’s ID
a. Updating official identification cards and documents by type/duration.
- Identification cards and documents that are valid for less than five years shall be updated upon expiration, such as commercial register or license.
- Identification cards and documents that are valid for more than five years shall be updated every 5 years or upon expiration, whichever comes first.
- Accounts opened under official approvals or letters, such as accounts of government entities, embassies and the like and international organizations and the like, or under open-term licenses and registrations, such as accounts of private associations, foundations and schools, shall be updated every 5 years maximum.
b. Updating identity information online:
- Banks, at their discretion, may update identity information online for customers*.
- Incompetent persons or the like shall not be allowed to use this service.
- Banks shall check the validity of and document the identification documents by using documents, data or information obtained from reliable and independent sources.
* This paragraph has been amended according to the circular No. (42033441), Dated 20/05/1442H, corresponding to 03/01/2021G.
4.2 Updating Customer Information
a. Banks may update the customer information in any of the following cases:
- The customer information is outdated (the period specified has ended), or there is a change in the customer information, for example, a change in the commercial entity’s board of directors;
- The customer's behavior in executing financial transactions on the account has changed.
- The bank performs due diligence in case of ML/FT risks.
b. Banks shall understand that official identification documents and approvals can be used to update account approvals; however, using such documents only is not sufficient to update the customer information.
c. Accounts of correspondent banks shall be updated every three years maximum.
d. Banks may accept updating the information of the customer via electronic banking services (e.g. online or phone banking) for those subscribing to such services, provided that the identification information is verified and documented using documents, data or information obtained from reliable and independent sources*.
* This paragraph has been amended according to the circular No. (42033441), dated 20/05/1442H, corresponding to 03/01/2021G.
5. Inoperative Accounts
This rule has been respectively amended according to the circular No. (44071426), Dated 07/09/1444H, corresponding to 28/03/2023G, and circular No. (46015210), Dated 06/03/1446H, corresponding to 09/09/2024G.Accounts, relationships and transactions shall be considered non-moving after two calendar years from the date of the last financial transaction carried out by the customer, his/her authorized representative, or his/her heirs. Inoperative accounts are divided into three types as described in this Rule. The purpose of this Rule is to keep accounts active, save the customer assets (money) that have not been used for a financial transaction (withdrawal or deposit – depending on the nature of the relationship), recorded debit transactions, or documented correspondences during the period specified in Article (5.2). The Rule also supports communicating with customers, returning the rights to their owners upon request immediately after the completion of documents and necessary procedures, changing account status to abandoned if banks are unable to reach the account holder after using all methods of contact. Accounts of government entities shall be excluded from the provisions of this Rule in respect of the phase of abandoned accounts only as set forth in paragraph (5.2.4), and the bank accounts for enforcement courts that are established for the purpose of collecting enforcement amounts are excluded from all three stages of classification outlined in Article (5.2). Accounts of statutory reserve deposited by financial institutions supervised by SAMA, whose balances are not allowed to be disposed of without prior written permission from SAMA, shall also be excluded from the provisions of this Rule.
5.1 Transactions Subject to this Rule
This Rule applies to all assets (accounts, banking relationships, transactions, etc.) in cash and in-kind for natural and juristic persons which are deposited in banks operating in Saudi Arabia. Such assets include the following:
1. Inoperative current and saving accounts on which no financial transaction (withdrawal or deposit) has been carried out by the customer, his/her authorized representative, or his/her heirs*.
2. Automatically renewed investment deposits whose owners do not visit the bank after the completion of the agreed-upon period and cannot be reached by the bank.
3. Bank transfers (SARIE, Swift, remittance membership, etc.) that have not been settled, deducted or received from the date they are made.
4. Shares, bonds and title deeds of properties pledged against banking facilities that are fully paid by their owners, but they do not contact the bank to regain their ownership.
5. Safe deposit boxes (lockers) rented by banks to customers with contracts that have not been renewed from the date of the customer’s last visit, and banks were unable to reach the owners by using direct contact or other methods of contact or checking the customer’s other accounts and information in the bank. SAMA instructions on safe deposit boxes shall be applicable.
6. Unpaid amounts and profits due to customers on their investments in different types of investment funds managed, or was managed, or held by the bank for customers whose investment periods have expired and their owners have not received the amounts due because they do not visit the bank to receive such amounts and profits, they do not have active accounts for the bank to deposit such amounts and profits, or they can not be reached by the bank after they have been notified in writing.
7. Prepaid services accounts, in a way that does not conflict with the Regulatory Rules for the Prepaid Payment Services.
8. Amounts on credit cards that are not used or claimed by customers.
9. Leasing finance settlement accounts.
10. Amounts held against letters of guarantee and letters of credit as of their expiry date.
11. Other amounts due to customers and the accruals related thereof.
* This paragraph has been amended according to the circular No. (44071426), Dated 07/09/1444H, corresponding to 28/03/2023G. Please refer to the Arabic version of this paragraph to read the last updated version.
5.2 Durations, Periods and Requirements for Dealing with Inoperative Accounts
5.2.1 Active Accounts
This rule has been amended according to the circular No. (44071426), Dated 07/09/1444H, corresponding to 28/03/2023G. Please refer to the Arabic version of this rule to read the last updated version.Accounts shall be considered active if no more than (24) calendar months have passed since the last recorded financial transaction (withdrawal or deposit, depending on the nature of the relationship) carried out by the customer, his/her authorized representative, or his/her heirs, or since the last reliable and documented correspondence.
5.2.2 Dormant Accounts
This rule has been amended according to the circular No. (44071426), Dated 07/09/1444H, corresponding to 28/03/2023G. Please refer to the Arabic version of this rule to read the last updated version.Accounts shall be considered dormant after completing (24) calendar months from the date of the last recorded financial transaction (withdrawal or deposit, depending on the nature of the relationship) carried out by the customer, his/her authorized representative, or his/her heirs, or the last reliable and documented correspondence.
Requirements for dealing with dormant accounts:
- Activation of dormant accounts shall be subject to double supervision with higher authority, one of which includes the branch manager or the branch operation manager.
- Withdrawal and transfer transactions on a dormant account shall only be accepted in the presence of the customer (natural person), the customer’s legal agent holding a deed allowing him/her to operate the account, the agent of the customer’s heirs or the person authorized to operate the account if the account is for a juristic person. As an exception, fax number or e-mail address registered in the bank records shall be accepted. In addition, carrying out financial transactions using electronic services, such as online services and phone banking, shall also be accepted. The status of the account and the nature of the executed transaction shall be clear to the customer.
- Dormant accounts shall be allowed to accept all deposits, domestic and international transfers and dividends made by another person other than the account holder. The account status shall not be changed from dormant to active due to carrying out such transactions.
- This shall be applied to all customers, including those who have other active accounts. Banks are required to contact customers and inform them of the action to be taken on his/her account before completing five years if such customers have other active accounts. Customers shall also be asked to activate the account by carrying out a transaction. If the account is not activated during the specified period, the requirements of unclaimed accounts shall be applied.
5.2.3 Unclaimed Accounts
This rule has been amended according to the circular No. (44071426), Dated 07/09/1444H, corresponding to 28/03/2023G. Please refer to the Arabic version of this rule to read the last updated version.Accounts shall be considered unclaimed after completing five years (60 months), including the dormant phase, from the date of the last recorded financial transaction (withdrawal or deposit, depending on the nature of the relationship) carried out by the customer, his/her authorized representative, or his/her heirs, or the last reliable and documented correspondence, and the bank becoming unable to reach the customer after using all methods of contact.
Requirements for dealing with unclaimed accounts:
- Banks shall transfer the balance of the account within the month following the five-year period to the bank’s suspense account created for unclaimed accounts.
- Such accounts shall be classified in the suspense account to be easy to deal with and manage according to the different communication policies and procedures and supervision aspects.
- Unclaimed accounts shall be allowed to accept all deposits, domestic and international transfers and dividends made by another person other than the account holder.
- Banks shall completely conceal the customer signature and balance from the branch screens during this phase. Supervision on such accounts shall be limited to the Head Office.
- If the customer visits the bank to activate the account or withdraw the balance, the customer may open a new account to which the outstanding balance in the bank’s records can be transferred, or may receive the balance by check or bank transfer after confirming the identity of the customer; legal agent; the agent of the customer’s heirs or the person authorized to manage and operate the account (as the case may be).
- Banks shall establish policies and procedures to ensure double supervision over the files of such accounts, with a supervision level higher than that applied to the other files. Banks shall also save such files separately from the other files and provide the necessary safety tools to protect the files from recordkeeping risks.
- Balances of such accounts shall be recorded as liabilities in the bank balance sheet. Banks shall not take any action regarding the balances regardless of the balance limit, the subsequent period and the account type.
- Outstanding debt obligations on such accounts shall be deducted before transferring the balance to the suspense account.
- The bank may close customer accounts whose balances are equal to (1,000) riyals and less, provided that the customer is notified a month prior to the date of closing, and notifies him when closing, document the notices and save them in his file. The bank must keep all the data of these customers and the amounts of their balances in the combined account; to hand it over to them when they go back to the bank.
5.2.4 Abandoned Accounts
Accounts shall be considered abandoned after completing the periods specified in this paragraph from the date of classifying the accounts as unclaimed, and the banks becoming unable to reach the customer after observing the account movements and his/her other transactions with the bank and using all methods of contact according to the communication policies and procedures provided in the Rules. The periods of such accounts shall be as follows:
- Unclaimed for a period of ten years (total of 15 years as of the last transaction) for current accounts, saving accounts, investment deposits, balances of deceased persons and credit amounts in credit cards.
- Unclaimed for a period of five years (total of ten years as of the last transaction) for bank transfers, safe deposit boxes, retained earnings, unpaid amounts and profits due to customers on their investments, shares; bonds and title deeds of properties pledged against banking facilities that are fully paid by their owners, but they do not contact the bank to regain their ownership, amounts held against letters of guarantee and letters of credit as of their expiry date, leasing finance settlement accounts, prepaid services accounts, and other amounts due to customers and the accruals related thereof
Requirements for dealing with abandoned accounts:
- Banks shall change the account status to abandoned within the month following the completion of the periods specified.
- Such accounts shall be under direct supervision of an authorized official from the bank senior management.
5.3 General Requirements
For inoperative accounts:
a. Account commissions and profits shall continue to be calculated as agreed upon or at market rates.
b. Accounts shall be checked and classified and the procedures stipulated in the Rules thereon shall be taken according to the periods specified for each.
c. Copies of documents and records of all the amounts and dues shall be kept as per the regulatory period of record-keeping.
d. Detailed records of accounts shall be kept. Such records must include, as a minimum, the following:
- Customer full name as shown in the identification document.
- Customer ID number as shown in bank records.
- Amount of assets and time periods related thereto.
- Nature of customer assets (current accounts, investment deposits, remittances, etc.).
- The national address, residence address and contact numbers, if any.
- Bank account number, relationship number or the serial number in safe records, if any.
- Ownership certificate numbers, if any or relevant.
- Any other data about the customer, if available or necessary.
e. Personal and financial data shall be kept by the bank in electronic records according to the technical specifications set by SAMA for easy future reference. A copy of such data shall be submitted to SAMA.
f. Provisions containing the periods and procedures for freezing accounts and other funds mentioned in these Rules shall be added to contracts, agreements, account opening forms signed by customers, as well as account statements sent to customers.
g. The role of the compliance department shall be supervisory at all phases and periods stated to ensure the fulfillment of the requirements of such accounts. In addition, rights shall be returned by the bank operation department.
5.4 Communication Policy and Procedures for Inoperative Account Holders
5.4.1 The Communication Policy and Procedures Shall Be Implemented in Accordance with the Customer Classification and Legal Nature, as a Minimum, as Follows
- Resident natural persons, including Saudis, GCC nationals, expatriates and politically exposed persons residing in Saudi Arabia.
- Non-resident natural persons, including Saudis, GCC nationals and foreigners not residing in Saudi Arabia, including those who leave Saudi Arabia and still have balances in their accounts.
- Resident juristic persons.
- Non-resident juristic persons.
- Commercial banks, including international accounts.
- Correspondent banks.
- Accounts of government entities.
5.4.2 Methods of Contact
Banks shall communicate with and try to reach customers, without disclosing any financial data, in all time periods specified by all possible legal means, for example:
- SMS.
- Email.
- Available phone numbers.
- Official letter sent by the mail to customers inside and outside Saudi Arabia.
- On-site visits by the bank relation staff.
- Messages on bank statements showing the account status and the actions required from the customer.
- Available public search tools and official information centers that help reaching customers by providing banks with the customer new contact numbers not registered with the bank, or informing banks of the customer status if alive, left Saudi Arabia, or if his/her business and financial activity was terminated.
- Media awareness advertisements explaining the relevant regulations, the actions required from dormant account holders, and balance search procedures.
- Inquiries to competent official authorities.
- Banks shall communicate with customers using the above mentioned methods during the different phases of inoperative accounts at intervals. Therefore, customers shall be contacted, at least, two times during each phase. If the customer is not responding and cannot be reached, banks shall stop communication a year after each stage and document the methods of contact used.
5.4.3 Bank Communication Unit
Banks shall establish a unit (formally established or defined) to implement the communication policy effectively. The tasks of the unit shall include implementing communication procedures and documentation, taking all related responsibilities and preparing periodic reports on communication and the results thereof.
5.4.4 Stages and Steps of Implementing Communication Policy and Procedures for Inoperative Account Holders
Banks shall comply with the following when communicating with customers according to each phase:
a. Dormant accounts:
- Banks shall inform customers, using their preferred methods of contact, of their account status, the required actions, and the procedure that will be taken by the bank in case customers fail to cooperate, including changing the account status to unclaimed.
- Government entities and private associations shall be officially informed, a year before changing the account status from dormant to unclaimed, without prejudice to the provisions of paragraph (4.2), of the procedures to be taken if there are no transactions in the account.
- Embassies, consulates, their educational institutions, and resident diplomats shall be officially informed, a year before changing the account status from dormant to unclaimed, of the procedures to be taken if there are no transactions in the account.
b. Unclaimed accounts:
- A bank check shall be issued with the unclaimed account balance of the government entity to the Ministry of Finance's account with SAMA. The check shall be sent to SAMA under an official letter and a copy of the check to the government entity and the Deputy Ministry for Financial and Accounts Affairs.
- Banks shall inform customers, using the preferred methods of contact based on the results of communication in the previous phase, of the unclaimed account status and that they are required to contact the bank to receive the balance and open alternative new accounts.
- A bank check shall be sent to embassies, consulates and their educational institutions with the account balance. Such procedure shall be documented.
c. Abandoned accounts:
- Banks shall inform customers, using the preferred methods of contact based on the results of communication in the previous phase, of the abandoned account status.
5.5 Internal Audit Control and Reports
Unclaimed and abandoned accounts shall be subject to the internal audit program once every two years, as a maximum. In addition, audit reports shall be submitted to the Audit Committee and the annual audit program shall not be linked to any other periodic programs related to such accounts.
5.6 Annual Statistical Reports Required by SAMA
Banks shall submit an annual report to SAMA at the end of March in accordance with the schedule sent by SAMA. The report shall cover all unclaimed and abandoned accounts, including the nature, type and number of the account as of the end of December of the previous year, without disclosing any personal information.
6. Application of KYC Principle and AML/CFT Requirements
- Banks shall fully apply the KYC principle, provided that the primary purpose of the application is for the bank to be fully aware and have a complete picture of the customer and the nature of his/her activities and transactions, prior to or during the business relationship or the process of opening the account, or prior to carrying out a transaction to a customer with whom it has no business relationship, by assessing the risks that the customer may impose on the bank and the level of such risks. The identification of customers and assessment of risks shall be made while ensuring the fulfillment of all statutory requirements of opening accounts or starting business relationship.
- Banks shall establish, define, review and update the necessary procedures for the application of the KYC principle in accordance with the relative significance and degree of risk assessment made by the bank.
- Banks shall ensure that staff has the experience and training required to identify and assess the customer’s level of risks.
- These Rules shall be read in conjunction with the requirements of the Anti-Money Laundering Law and its Implementing Regulations, the Law on Terrorism Crimes and Financing and the Guidelines issued thereunder.
- The Compliance Department shall have the authority and right to timely access the customer identification data, due diligence information, transaction records and other relevant data.
7. Curators, Legal Agents, Custodians and Authorized Persons (Natural or Juristic)
Banks shall ascertain the nature of the relationship for natural curators, legal agents, custodians and authorized persons when opening accounts and check the validity of the documents submitted.
8. On-Going Monitoring of Accounts and Transactions
- Without prejudice to the provisions of the Anti-Money Laundering Law and its Implementing Regulations, the Law on Terrorism Crimes and Financing and the Guidelines issued thereunder, Banks should have appropriate systems in place to monitor the customer’s transactions and activities and identify any suspicious or wrong behavior. Manual transaction monitoring is not sufficient and banks shall invest in developing electronic systems in accordance with the best standards in monitoring and information security and protection to continuously monitor customers’ transactions.
- Banks shall continuously assess internal risk-based controls in order to benefit from unusual activities that have been detected.
- The electronic systems used in banks should be suitable for the nature of the bank's risk profile, and the monitoring system should be integrated with the bank's core systems. In case of incompatibility between the two systems due to integration, the bank shall be prepared to take the necessary precautions and manual procedures to address the incompatibility.
- If the bank suspects that banking accounts are being used illegally or that the source of the money deposited is found to be earned from illegal business, the bank must notify the Saudi Arabia Financial Investigation Unit of such case.
9. Training as a Key Principle for these Rules
- Banks should not assign any teller or customer service staff before attending courses on KYC, AML/CFT measures, and ethical and professional behavior of bankers.
- Banks should put in place continued training programs to provide on-job training to employees in these areas. Banks should include extensive training on the contents of these Rules and their applications in their training programs.
10. Disclosure of and Enforcement on Bank Accounts, Balances and Relationships
- Subject to SAMA’s instructions on providing government and non-government entities with documents, information and data of customer bank accounts, the disclosure of and enforcement on bank balances, accounts and relationships (such as, blocking and compulsory deduction) shall be made by an order from SAMA upon the request of the competent authorities.
- Enforcement on banking relationships means blocking, compulsory deduction, check issuance and money transfer from the bank's customer accounts.
- Procedures taken for the disclosure of and enforcement on bank balances, accounts and relationships at all stages shall be strictly confidential. Such requests shall be received only by SAMA except for cases stated in SAMA’s instructions.
- Banks shall carry out requests for disclosure and enforcement according to the form, manner and period specified by SAMA.
10.1 Disclosure of Bank Balances, Accounts and Relationships
For the purpose of disclosing bank balances, accounts and relationships upon SAMA’s request and according to the relevant instructions, banks shall search for all relationships between the bank and the customer, including all active; closed and suspended accounts, inoperative accounts, deposits, valuable boxes, credit cards, remittance accounts (remittance membership) and any other relationships or products offered by the bank. Banks shall ensure that the search is made based on the customer name, ID or the document under which the account is opened according to the following:
- The search shall include sole proprietorships owned by the person inquired about and his/her participation in companies. Banks shall state in the statements submitted to SAMA that the search included such accounts and transactions. However, if the disclosure is requested for a certain relationship/transaction, banks shall only include the requested relationship/transaction in the statement.
- The validity of information sent to SAMA in compliance with the requirements of this Rule shall be checked.
- In case of requesting the disclosure of balances, accounts and relationships of a natural person, the disclosure shall include all the information required above in this Rule, in addition to institutions and stores owned by the natural person pursuant to the principle of full financial disclosure. If disclosure is requested for a specific institution or store, disclosure shall include the relationships related to such institution or store not the owner.
- In case of requesting the disclosure of balances, accounts and relationships of a natural person, disclosure shall be limited to the name of the company and the percentage of ownership. The accounts and balances of companies the natural person co-owns or in which he/she owns shares shall not be disclosed. The same shall apply to joint accounts by disclosing only the number of the account and the percentage of ownership of the customer subject of the disclosure request, unless otherwise provided in SAMA's request.
10.1.1 Attachment of Bank Balances, Accounts and Relationships
Banks shall comply with the following when attaching bank accounts, balances and relationships upon the request of SAMA in accordance with the relevant instructions:
- If a specific amount of money is requested to be attached from the customer’s account, the bank shall, from the receipt of the request, commit to attaching only the amount of money specified from the outstanding balance if the amount is available. In case the amount is not available, the bank shall not allow the customer to make debit transactions from the outstanding balance in the customer’s accounts (withdrawal, transfer, etc.) or open new accounts. Only credit transactions shall be allowed until the amount is available again in the account.
- Attachment shall include all credit balances in the bank accounts and relationships, except the accounts of the companies that the customer co-owns directly or indirectly, and the joint accounts, unless otherwise provided in SAMA's request.
- If the request includes precautionary or executive attachment of a specific amount of money, attachment shall be enforced only on the amount specified. Once the amount requested to be attached is available, SAMA shall be informed and attachment of other accounts and amounts of money shall be lifted.
- If attachment is requested for a specific period of time, attachment shall be automatically lifted upon the expiry of the period.
- Banks shall, when imposing attachment, comply with the instructions issued on deduction. If deducting from an employee, the amount of money seized shall not exceed one third of the net monthly salary, except for the alimony debt if provided for in SAMA’s instructions. If deducting from a retiree, the amount of money seized shall not exceed one quarter of the net monthly pension, except for the alimony debt if provided for in SAMA’s instructions. Banks shall also comply with the instructions issued on bank accounts opened for or receive government compensation and subsidy for citizens, as well as any other instructions on the amounts excluded from attachment. In addition, banks shall allow the withdrawal of such amounts form ATMs.
10.1.2 Instructing Banks to Stop Dealing with Customers
- Upon receipt of requests to stop dealing with customers, banks shall ban such customers from managing their existing banking relationships and shall not
- be allowed to establish new relationships or carry out debit transactions. The ban shall be imposed in respect of the customer’s funds and in his/her personal capacity only,
- and shall not include the fact that the customer is a guardian, curator, legal agent or a person authorized to manage accounts not opened in his/her name, unless otherwise provided in SAMA's request.
- If the stop dealing order is issued for a specific period of time, the order shall be automatically lifted upon the expiry of the period.
- If the stop dealing order is issued with an attachment order, the stop dealing order shall be automatically lifted upon lifting the attachment order by the bank.
10.1.3 Compulsory Deduction from Accounts
- Compulsory deduction shall be enforced by an order issued from SAMA to the bank at the request of the authorized entities. Upon the request, the bank shall deduct a specified amount on a monthly basis from the bank's customer account to a specific beneficiary account.
- Compulsory deductions and expenses are considered priority and must be carried out or deducted before any other debts. Necessary steps shall be taken by banks to ensure the execution of such action.
- SAMA’s deduction request for expenses or debts is to be made on the customer bank account to which salary payments are credited. The deduction shall be made promptly upon crediting such payments to the account. Necessary steps shall also be taken to ensure the execution of such action. The only exception here, however, is when SAMA’s request states that such deductions shall be made from another bank account.
10.2 Freezing in the Event of Death, Bankruptcy or Loss of Legal Competence
10.2.1 Official Notice on Freezing by Reason of Death, Loss of Legal Competence, Starting Any Liquidation or Administrative Liquidation Procedures Under the Bankruptcy Law, or Going into Liquidation Under Companies Law
I. In accordance with the applicable laws, the bank must stop all dealings related to the account and freeze the balance therein if it becomes aware of, or receives official notification from a competent authority about, any of the following:
a. Death of the account holder or one of the account holders.
b. Restriction on the legal competence of the account holder or one of the account holders.
c. Issuance of a judicial order or a decision from the company’s general assembly or partners to liquidate the company that owns the account.
d. Starting any liquidation or administrative liquidation procedures under the Bankruptcy Law for the account holder.
II. When carrying out the above, the following shall be considered.
- The absence of a provision in the company’s memorandum of association and articles of association that allows the company to continue if any of the cases mentioned in Paragraphs (a) and (b) of Item (I) stated above occurs.
- The account must be operated in accordance with Paragraph (c) of Item (I) stated above by the liquidator appointed by a judicial liquidation decision or a decision of the company’s general assembly or partners. The decision should include the appointment of the liquidator, restrictions imposed on its power and the period needed for liquidation (provided that such period shall not exceed five years if the decision is issued by the company’s general assembly or partners). The exception to the provisions of this paragraph and Paragraph (c) of Item (I) above is when the company’s memorandum of association, its articles of association, or partners’ agreement contain(s) a provision on how to liquidate the company. In such case, the liquidation should be performed thereby, as the case may be.
- The account shall be operated in accordance with Paragraph (d) of Item (I) above by the liquidator or bankruptcy committee as determined in the decision of the competent court.
- Checks issued before the occurrence of any of the cases mentioned in Item (I) above should be considered, unless otherwise stated by a court order issued thereon.
10.2.2 Request of Heirs, Guardians and Curators to Banks to Disclose Transactions and Account Balances of their Deceased or Incompetent Persons and the Like
10.2.2.1 Inquiring About and Operation of a Deceased’s Account
- If any person requests a bank to disclose transactions, accounts’ balances or banking relationships of his/her legator, the bank must respond to the request after verifying the existence of the necessary documents, which empower him/her to act so, including, as a minimum, the death certificate and determination of heirs deed (or an original copy thereof) that defines the names of heirs, including the person requesting the disclosure. If the requesting person is a legal agent of all the heirs or of one of them, he should produce the original power of attorney of his heirs or any of them that gives him the right to inquire about the legator's balances. The inquirer should be provided with the answer in a written form. The statement provided should be accurate and should include all banking relationships pertaining to the deceased. The Bank should keep a copy of the statement after being signed by the recipient.
- To operate the accounts of a deceased after freezing balances and stopping dealings because of death, the bank must verify the persons who have the right to the account of the deceased. Disbursement should be made based on legal practices and documents, including, as a minimum, the provision of the determination of heirs deed (or an original copy thereof) and the presence of heirs or their representatives collectively or individually, provided that such representatives have a power of attorney thereon. In addition, the decision of disbursement or distribution made by mutual agreement or by the competent court should be presented to the bank. If it is impossible to provide any of the required documents in connection with the deceased expatriate, the bank, after obtaining an attested death certificate, should issue a banking check with the amount of the balance in the name of the deceased’s country’s embassy to hand it to his/her heirs. The bank must comply with the requirements and procedures for heirs’ accounts set forth in Rule (200.1.1).
- Providing heirs or their representative with the deceased’s account statements or account activity for the period preceding the date of death is prohibited unless SAMA informs the bank of the issuance of a judicial order requiring so.
10.2.2.2 Inquiring About Incompetent Persons’ Accounts
If any person contacts a bank to inquire about or require disclosing of transactions, accounts’ balances or banking relationships of an incompetent person, the bank must respond to the request after verifying the existence of the necessary empowering documents, including, as a minimum, a legal document that proves the person’s guardianship or custody over the incompetent person. The inquirer should be provided with the answer in a written form. The statement provided should be accurate and should include all banking relationships pertaining to the incompetent person. The bank should keep a copy of the statement after being signed by the recipient. Providing curators or guardians with the incompetent person’s account statements or account activity information for the period preceding the issuance of the custody or guardianship deed is prohibited. For account operation, the provisions of the related rules should be applied on a case-by-case basis (interdicted, disabled, etc.).
11. Providing Services to Customers with Disabilities and Giving them Priority
The bank should give the optimum priority and care to customers with disabilities in a way that facilitates the procedures of providing banking services thereto.