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  • Controls for Handling Banking Transaction Procedures

    No: 381000122205 Date(g): 10/9/2017 | Date(h): 19/12/1438Status: In-Force

    Translated Document

    Based on the powers vested to SAMA under its regulations issued by Royal Decree No. 23 dated 23/05/1377H, and the Banking Control Law issued by Royal Decree No. M/5 dated 22/02/1386H, and Ministerial Decision No. 3/2149 dated 14/10/1406H regarding issuing instructions as needed, and with reference to SAMA’s strategy and its goals of aligning with the objectives of Vision 2030, enhancing the quality of services, and cooperating with government agencies, particularly those authorized by law to request enforcement on bank customers' accounts (such as seizure or others), or to provide information or documents related to such accounts in response to the increasing number of transactions, which are expected to double in the coming period.

    In reference to what SAMA has previously emphasized in past circulars regarding the importance of completing all transactions within the specified time and manner in accordance with the relevant regulations, most notably the Enforcement Law and its implementing regulations, the Anti-Money Laundering Law, the Law of Civil Procedures, the Law of Criminal Procedures, the State Revenue Law, the Value Added Tax Law, and the implementing regulations governing the rules and procedures for collecting Zakat from taxpayers, as well as the Royal Decree No. 34945 dated 03/08/1438H concerning the referral of contracts, privileges, legal documents, financial penalties, and any other legally mandated revenue sources issued by the state to the enforcement judiciary. Given the importance and sensitivity of these transactions and their direct impact on bank customers, as the responses to these requests could result in judgments or decisions that may either condemn or acquit individuals, or establish or negate rights, it is necessary to act in a manner that ensures the protection of banks and their employees from being subject to procedures or penalties by SAMA or under the other aforementioned regulations.

    Attached herewith are the regulations that must be adhered to when dealing with banking procedure transactions. SAMA emphasizes that the responsibility lies with the banks and exchange companies towards the authorized entities, SAMA, and the customer in the event of a breach of the provisions of this circular. Necessary legal procedures will be applied in the event of non-compliance.

    Please take note and provide evidence that the requirements and regulations outlined in this circular have been met.

    • First: Transaction Processing Timelines

      1.  To immediately initiate the completion of banking procedure transactions received from SAMA, without exceeding the following timelines:

                                Transaction Category                                       

                       Maximum Completion Time                         

        Judicial Banking Procedures

        Two working hours

        Civil (General) Banking Procedures

        Two working Days

        Security Banking Procedures

        Five working Days

         

      2. In the event that there is no relationship with the person (individual/legal entity) at the bank/company, an immediate response on the transaction must be provided.
         
      3. SAMA may, at any time and whenever necessary, reduce the maximum completion time for some of the banking procedure transactions outlined in paragraph (1) of section (First), and banks and companies must complete the transactions within the specified periods.

    • Second: Departments and Units Handling Banking Procedure Transactions

      1. Grant the departments and units that handle banking procedure transactions full authority to process transactions, execute directly on customer accounts, disclose information about them, and establish mechanisms to facilitate the swift and easy provision of banking documents related to these transactions.
         
      2. Ensure sufficient human resources are available to process transactions during official working hours and to keep pace with the increase in workload.
         
      3. Provide the necessary technical resources to comply with the provisions of this circular and to keep up with the increasing workload.
         
      4. The units and their employees must operate independently and be fully dedicated to handling banking procedure transactions.
         
      5. Ensure continuous monitoring of banking procedure transactions received by the bank/company and complete them within the specified timeframes to avoid delays, transaction backlogs, or carrying them over to the next day.
         
      6. Develop plans to mitigate the risks of shortages in human resources or technical failures at the bank/company or any risks that may affect business continuity.
         
      7. Emphasize to these units the confidentiality of the data and information included in banking procedure transactions, and prohibit the disclosure, publication, or sharing of such data and information with anyone for any reason.
         
      8. The prohibition referred to in paragraph (7) of section (Second) above excludes cases where the inquirer has legal standing (a bank customer or their authorized representative) when inquiring about transactions related to enforcement on their accounts. These are exclusively transactions that affect the customer’s balance, such as (account and fund freezes, lifting of freezes, transaction bans, lifting of bans, compulsory deductions from accounts via transfers or issuing checks, confiscation of funds, account suspensions or lifting thereof). After verifying the inquirer’s status, they should be provided with the request number and date. In the case of judicial banking procedure transactions, in addition to the request number and date, the customer should be provided with the judicial decision number, date, and the court that issued the decision, and the customer should be directed to contact the relevant court.

    • Third: Transaction Processing Mechanism

       

      1. Execute the content of the transactions on the bank/company system as required and within the timeframes specified in paragraph (1) of section (First) above, and fill in the fields in the SAMA Net system in accordance with their content.
         
      2. The bank’s responses must be clear and reflect the actions taken by the bank/company.
         
      3. In case the transaction involves original documents (original checks, original banking documents), they must be sent before the expiration of the time specified in paragraph (1) of section (First) above. The shipping number of the original documents mentioned in this paragraph should be included when responding to the transaction in the SAMA Net system. Each transaction’s original documents must be placed in a separate, sealed envelope, accompanied by an official letter addressed to the Manager of the Banking Procedures Division, and the envelope should clearly indicate the transaction information as referenced in the SAMA Net system.
         
      4. Adhere to the regulations governing transaction processing, such as the Unified Processing Mechanism, the Advanced Processing Mechanism, the rules for opening and operating bank accounts, and other relevant systems and instructions.
         
      5. Comply with the provisions of Circular No. 381000058769 dated 02/06/1438H regarding the mechanism for submitting reports or problems and malfunctions in SAMA Net system.

       

    • Fourth: Verification of Compliance with Instructions

      SAMA will verify the bank's or company's compliance with these instructions as follows:

      1. Issuing alerts to the bank/company in cases of delays in processing transactions beyond the specified time frames, accumulation of transactions, or postponement to the following day. The bank/company must adhere to the corrective actions specified in the alerts sent by SAMA. Receiving these alerts indicates a failure by the bank/company to comply with the aforementioned instructions.
         
      2. Banks and companies must provide SAMA with a quarterly report starting from the third quarter of the current year (2017G). This report should include a self-assessment of the bank/company's compliance with all requirements and regulations of this circular. The reports must be sent to the Director of the Banking Procedures Division within two weeks from the end of the quarter. Compliance with the specific format for these reports, which will be communicated later, is required.
         
      3. SAMA, through its Performance Monitoring Team, will directly follow up on all transactions sent to banks and exchange companies to ensure compliance with the requirements outlined above.
         
      4. Conducting field verification to assess banks' and companies' adherence to the provisions of this circular and conducting desk-based reviews by studying and analyzing reports, data, and observations, as well as monitoring the performance of banks concerning banking procedure transactions.