| 6. | No Finance Company (FC) shall carry out deposit taking business without prior SAMA written approval to designate it as Deposit Taking Finance Company (DTFC).
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| 7. | An application for a SAMA approval to carry out deposit taking business shall be accompanied by the Feasibility study and three-year business plan of the proposed deposit-taking business, detailing the mission, vision, scope and nature of business operations, profitability analysis and internal controls and monitoring procedures, including but not limited to:
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| | i. | the proposed organizational structure |
| | ii. | the market to be served by the FC; |
| | iii. | a schedule of all the preliminary expenses including the FC costs, all expenses relating to the establishment or transformation of the FC; |
| | iv. | projected balance sheets, income and expenditure statements and cash flow for three years supported by:
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| | | a. | projected deposit mobilization and profit payable, stating separately anticipated sources of deposits; |
| | | b. | forecasted lending and advances to be made and profit receivable, stating major areas of lending including the intended sectoral lending composition; |
| | | c. | forecasted cash and other liquid assets to be maintained; |
| | | d. | the required provision for bad and doubtful debts and loan write-offs, including the policy and procedures manual; |
| | | e. | projected operating expenses including rents, salaries, employee benefits, and director's remuneration, etc.; |
| | | f. | proposed levels of fixed assets, including business premises and equipment; |
| | | g. | other income, including commissions, fees and discounts etc. |
| | | h. | profit rate sensitivity analysis on the projections submitted or other similar analysis, providing necessary levels of scenario planning should economic conditions change or when business expectations fall short; assumptions underpinning the pro-forma financial statements, the sensitivity analysis and scenario planning must be fully elaborated; |
| | | i. | statistical data and other market information, which may have been collected and analyzed covering economic activities and the planned areas of operation, where revenue and expenses will be incurred, including detailed competitive analysis; and |
| | | j. | the planned scope of operations including services and products to be offered, the capability to provide these services, the projected demand for the services, and different groups of customers or market segments the FC wants to serve; |
| | | k. | the FC's risk-management policies and internal control systems including, among others, board and senior management oversight, internal controls, physical infrastructure, use of information technology, including but not limited to the following: — |
| | | I. | deposit mobilization strategies or plans and marketing methodologies; |
| | | m. | lending and credit administration policy manual; |
| | | n. | human resource development manual; |
| | | o. | assets manual; |
| | | p. | liquidity and funds management policies and procedures; |
| | | q. | management information system and Information Security; |
| | | r. | capital, planning and budgeting; |
| | | s. | accounting procedures manual; and |
| | | t. | internal audit and control manuals (including compliance and AML/CTF controls);
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| | v. | evidence of sources and availability of capital including copies of bank statements, Treasury Bills, or other forms in which the capital is held.
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