1.1 Introduction
Effective from 2022-03-14 - Dec 31 2022
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| The Saudi Central Bank (SAMA) issued these rules in exercise of the powers vested upon it under Finance Companies Control Law promulgated by the Royal Decree No. (M/51) on 13/08/1433H and in pursuance of the Implementing Regulation of Finance Companies Control Law promulgated by the resolution of the Governor No (2/M U T) dated 14/04/1434H. | ||
| These rules, issued pursuant to Article 24 of the Implementing Regulations of the Finance Companies Control law, aim to set minimum requirements for prescribed licensed finance companies on sound liquidity risk management practices. | ||
| SAMA expects finance companies to establish and maintain a robust framework for liquidity risk management, having following key elements: | ||
| — | Board and senior management oversight; | |
| — | The establishment of policies and risk tolerance; | |
| — | The use of liquidity risk management tools such as comprehensive cash flow forecasting, limits and liquidity scenario stress testing; | |
| — | The development of contingency funding plans; and | |
| — | The maintenance of a sufficient cushion of high quality liquid assets to meet contingent liquidity needs. | |