Section One: Definitions and General Provisions
The Regulation is issued pursuant to powers granted to SAMA under the following laws and regulations:
a. Charter of the Saudi Arabian Monetary Authority, issued by Royal Decree No. 23 dated 23/05/1377H; and
b. Banking Control Law, issued by Royal Decree No. M/5 dated 22/02/1386H.
Banking Agents shall comply with this Regulation in addition to relative laws, regulations, and instructions, including the following:
- Banking Control Law and its instructions;
- Anti-Money Laundering Law and its Implementing Regulations;
- Law on Terrorism Crimes and Financing and its Implementing Regulations;
- SAMA Rules on Outsourcing, and Outsourcing Controls for Foreign Banks’ Branches Operating in Saudi Arabia; and
- Rules Governing Anti-Money Laundering and Combating Terrorist Financing issued to banks, money changers, and foreign banks’ branches operating in Saudi Arabia.
Article 1: Definitions
The following terms and phrases, wherever mentioned herein, shall have the meanings assigned thereto unless the context otherwise requires:
SAMA: Saudi Arabian Monetary Authority*.
Bank: any bank licensed to carry out banking business in the Kingdom of Saudi Arabia in accordance with the provisions of the Banking Control Law.
Regulation: Regulation of Agent Banking.
Agent(s): a legal entity contracted by a licensed commercial Bank and approved by SAMA to engage in Agent Banking activity.
Agent Banking: the provision of banking services and/or products by an Agent on behalf of a Bank in accordance with the provisions of this Regulation.
Know Your Customer (KYC): the processes that the Agent needs to carry out in order to identify its Customers and beneficiaries and verify their identities.
Conflict of Interest: a situation involving achieving a material or moral interest that contradicts job duties.
Exclusive Agent: an Agent that entered into an agency agreement with one Bank to exclusively provide banking services and/or products on behalf of the contracting Bank.
Multiple Agent: an Agent that entered into a non-exclusive agency agreement with a Bank or into agency agreements with multiple Banks to provide banking services on its/their behalf.
Customer: any natural or legal person obtaining banking services or products or to whom such services or products are offered.
* The Saudi Arabian Monetary Agency was replaced by the name of Saudi Central Bank in accordance with The Saudi Central Bank Law No. (M/36), dated 11/04/1442H, corresponding 26/11/2020AD.
Article 2: Purpose and Scope
1. The objectives of this Regulation are as follows:
a. Increasing banking services outreach and promoting financial inclusion to the unbanked and under-banked population while maintaining the safety, soundness and stability of the banking sector;
b. Encouraging Banks to use Agents in the provision of banking services to reduce the cost of banking services and to foster financial inclusion, reach and depth;
c. Setting a regulatory and supervisory framework for Agent Banking, in compliance with which banking services are offered whilst ensuring full compliance with the Banking Control Law and the implementation of its provisions in addition to SAMA instructions;
d. Providing the minimum standards and requirements for Agent Banking to organize business;
e. Outlining the permissible activities that can be carried out by a banking Agent after receiving SAMA’s non- objection; and
f. Providing minimum standards of data and network security, consumer protection and risk management to be adhered to in the conduct of Agent Banking activity.
2. This Regulation shall apply to all Banks desiring to contract with an Agent.
Article 3: Responsibility
1. It is the responsibility of the board of directors of each Bank to ensure compliance with this Regulation. Banks shall be solely responsible for the selection of Agents. Without prejudice to the provisions hereof, the relationship between the Bank and its Agent shall be direct and governed by a contract.
2. The Bank is responsible for all actions or omissions of its Agent(s) in the matter of providing the permissible banking products and services on behalf of the Bank.
3. The board of directors of each Bank shall be responsible for approving policies, procedures and processes which ensure the following:
a. Credible Agents are identified and selected.
b. Risks associated with Agent Banking are identified, documented and addressed. Adequate risk management policies are developed and implemented, in a way consistent with relevant rules and instructions issued by SAMA.
c. Agent Banking activities are constantly monitored to ensure compliance with the provisions hereof and other relevant laws and rules.
d. All necessary controls are in place and complied with to ensure that the contracted Agent fully complies with all legal and supervisory requirements, including SAMA requirements related to AML/CFT, combating embezzlement and financial fraud, and information security.