Inclusion of Banks' Investments in Local Development Bonds as a Component of Liquid Assets
| No: 10348/BC/371 | Date(g): 22/3/1989 | Date(h): 15/8/1409 |
Effective from 1989-03-22 - Mar 21 1989
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Reference our circular No. BC/120 dated 29-5-1404, regarding bank liquid reserves and components under article (7) of the Banking Control Law,
We wish to advise you that you can now list investments in local government bonds as a component of liquid assets for the purpose of calculating your liquid reserves, provided for in item (2) of article (7) which is presently fixed at 20% of deposits. Please take into consideration that the figure appearing in item 19-1 is the net government bonds kept by the bank for its own account, excluding bonds sold to bank clients or redeemed by SAMA. You are required to provide us with the attached analytical statement as one of the attachments of your financial position.
In view of the issuance by the Government of the Kingdom of Saudi Arabia of U.S. dollar-denominated Sukuk bonds as part of the fiscal policy and as this type provides the investment option as high-quality liquid assets for banks, the Central Bank has decided to include this financial instrument to calculate the liquidity ratio stipulated in the above-mentioned paragraph of the Banking Control Law. These bonds and sukuk are not included among the financial instruments supporting repurchase operations (Repo-Eligible) *.
Please be informed and act accordingly.
* This paragraph has been added in accordance with SAMA's Circular No. 391000002306, dated 8/1/1439.