500. Rules for Opening Bank Accounts for Government Entities
500.1 Rules for Opening Bank Accounts for Ministries and Saudi Government Entities
500.1.1 Ministries and Government Entities Listed in Appendix (A) and the Like
Banks may open Saudi riyal accounts for government entities subject to the following:
1. The government entity shall submit an account opening application to the Ministry of Finance (the Deputyship for Financial and Accounts Affairs). In order to complete the opening application process or activate the account, a list of existing bank accounts with SAMA and other banks must be attached so as to avoid replication of accounts with the same purpose. After considering the application, the Ministry of Finance shall inform SAMA about opening the account, and the government entity shall provide the bank with the names, specimen signatures and ID copies of the authorized persons.
2. Name of the beneficiary shall be included in the payment order related to deposits to the account (Due to the order of the bank, Account No…).
3. The bank account shall be in the name of the government entity, not a natural person or his/her position or job, and its purpose shall be specified in order to differentiate it from other accounts.
4. If a government entity wishes to change its account name, it shall submit an application in this regard to the Ministry of Finance (the Deputyship for Financial and Accounts Affairs) to make a decision of approval or disapproval and then notify SAMA of such decision to be communicated to the bank.
5. A checkbook shall be requested by an official letter signed by those authorized to withdraw funds.
6. Authorization to deposit and withdraw amounts shall be issued by the concerned party. Authorized persons may not delegate their power to others unless authorized to do so by the concerned party. Official letters addressed to the bank by authorized persons to issue bank checks or make internal or external transfers in the official entity’s forms or the approved bank forms may be accepted, provided that such letters are jointly signed by the authorized persons only.
7. Withdrawal from the account shall be as per dual control, and in the case of withdrawal by checks, the check shall be jointly signed by the authorized persons.
8. E-services provided to government entities must include the following: Viewing and extracting of account statements, internal and external transfers, and payment of bills.
9. A government entity may not open any account in a foreign currency unless this is included in an approval given by the Ministry of Finance and communicated to the bank by SAMA.
10. Banks may not extend to any government entity any loans or facilities or allow any overdraft of more than the amounts drawn under payment orders upon the Ministry of Finance, whether for salaries or for any other purposes, except on approval of the Council of Ministers.
11. Government accounts shall not be transferred from one bank to another unless the approval of the Ministry of Finance is obtained therefor and communicated to the bank through SAMA. In addition, there shall be cogent reasons supporting the transfer. If the purpose of the account is fulfilled and the account is no longer needed, the Deputyship for Financial and Accounts Affairs at the Ministry of Finance shall be informed in order to request SAMA to close the account.
12. Signatories of the accounts of Saudi government entities and agencies shall be Saudis only. No authorization shall be granted to no-Saudis in this regard.
500.1.2 Rules for Opening Bank Accounts for Government Entities to Receive Donations for their Own Account
The bank may open Saudi Riyal accounts for government entities to receive gifts and donations for their own account. The following requirements shall be met:
1. The request to open a bank account shall be submitted after obtaining the approval of the Ministry of Finance notified through SAMA. Such request shall indicate that the purpose of opening the account is to receive donations for the government entity.
2. Two signatories shall be determined by the concerned minister or the head of the entity, in addition to the financial controller in the government entity. The bank shall obtain IDs copies and specimen signatures of such authorized persons. Those copies shall be attested as true copies of the original by both the government entity and the bank. Changing the signatories or financial controller requires sending a letter from the concerned minister or the head of the entity or his authorized representative to the bank where the account is opened.
3. Deposit in the account shall be by checks only. The name of the payee shall be the government entity, and such checks shall be presented for deposit through the signatories.
4. A checkbook shall be requested by an official letter signed by those authorized to withdraw funds.
5. Withdrawal from the account shall be made only by checks signed jointly by the authorized signatories and the financial controller.
This rule has been amended according to the circular No. (45070397), Dated 13/11/1445H, corresponding to 20/05/2024G.500.1.2.1 Bank Accounts of Government Entities, Designated for Activities and Services Financed Through Sources Other Than the State Budget
The bank may open separate accounts for academic and specialized government entities (e.g. universities, institutes and research centers) for the purposes of research works, studies, consultation, specialized services and the like that are funded by beneficiaries (not through the state budget). The following requirements shall be met:
1. The bank shall receive a request from the rector/head of the entity (university, institute, scientific center, and the like) to open an account; such request shall indicate that the account is designated for an activity to be funded through sources other than the state budget.
2. The government entity shall specify the purpose of the account and, if possible, the reasons supporting being contracted with or assigned to carry out advisory or technical tasks.
3. The name of the account shall reflect its purpose.
4. Signatories shall be determined by the government entity’s rector/head. The bank shall obtain IDs copies and specimen signatures of such authorized persons. Those copies shall be attested as true copies of the original
5. by both the government entity and the bank. Changing the signatories requires sending a letter from the entity’s rector/head to the bank where the account is opened.
6. The bank shall obtain a copy of the government entity’s regulations governing the financial affairs of the financed activity (university, institute ...).
7. The account shall be opened for the duration of the project or for a period of one year where the duration is not defined. The validity of the account may be extended for another period/additional periods by a letter from the rector/head of the entity to the bank, requesting an extension and including supporting reasons.
500.1.3 Bank Accounts to Invest the Funds of Persons Covered by the Law of the General Commission for the Guardianship of Trust Funds for Minors and their Counterparts (Wilayah)
Bank accounts for these entities shall be opened after fulfilling the following requirements:
1. The bank shall receive a letter from SAMA, requesting the opening of a specific bank account for investing funds of those covered under Wilayah’s law (unknown persons, minors, mentally ill persons, etc).
2. The concerned division at Wilayah shall provide the bank with the names of persons authorized to operate the account under a joint signature, copies of their IDs and their specimen signatures. Further, the bank shall also ensure that the account opening agreement is completed and signed by such persons.
500.2 Bank Accounts of Countries and Non-Saudi and Non-Resident Government Entities
500.2.1 GCC Countries and GCC Government and Quasi-Government Entities
The bank may open accounts for GCC government and quasi-government entities. The following requirements shall be met:
1. The bank shall obtain a copy of the ministerial resolution issued by the GCC country, requesting opening of a bank account.
2. The concerned GCC entity shall send a letter to its Saudi counterpart, the Saudi Ministry of Finance or the Saudi Ministry of Foreign Affairs, requesting opening of a bank account.
3. The bank shall obtain copies of the IDs of persons authorized to sign jointly for the account.
4. The bank shall obtain the signatories’ specimen signatures.
5. The bank shall receive SAMA’s approval for opening the bank account.
500.2.2 Non-GCC Countries and Non-GCC, Non-Resident Government and Quasi-Government Entities, Except Hajj Missions
Banks operating in Saudi Arabia shall not open bank accounts for non-GCC countries and non-GCC, non-resident government and quasi-government entities, except Hajj missions, unless official approval of the Minister of Foreign Affairs is granted and communicated to the bank through SAMA. Such approval shall indicate the name of the account, sources of funds, names of signatories and how to change them. Changing the signatories requires the approval of the Ministry of Foreign Affairs unless the approval for opening the account as communicated through SAMA has clearly allowed changing such signatories by a specific person(s) or entity. The bank shall classify such accounts as of high risk.