Saudi Arabia proposes lower bank guarantee requirements for finance licenses
In a statement, the Saudi Central Bank, known as SAMA, said it has launched a public consultation on a draft update to the Finance Companies Control Law through the National Competitiveness Center's 'Istitlaa' platform. The draft proposes regulatory changes aimed at supporting sector growth and stability.
The draft update highlights SAMA's ongoing efforts to support the financial sector's stability and growth by increasing the aggregate financing amount offered by a company.
'The update includes easing the requirements for companies applying for licenses by reducing the bank guarantees required to submit licensing applications,' said SAMA.
It added: 'The update also includes a revision of relevant provisions stipulated by related parties and outlines cases of expiration of licenses granted to finance companies.'
Under the draft, the minimum bank guarantee would be cut to 20 percent of the minimum required capital, compared to the current requirement of 100 percent, according to the regulatory proposal reviewed by Arab News.
This change is designed to enable finance companies to provide more liquidity and raise their contribution to Saudi Arabia's gross domestic product.
The draft also introduces clearer criteria for approving new activities by finance companies, requiring applicants to demonstrate adequate risk management frameworks, sufficient financial resources, and compliance with governance standards.
It defines specific cases where licenses can be revoked, including prolonged inactivity or violation of regulatory obligations.
The public comment period will be open for 30 days, after which SAMA will assess feedback before finalizing the new regulations.
Strengthening the financial sector is a key priority under Saudi Arabia's Vision 2030.
As part of this effort, the Kingdom launched the Financial Sector Development Program to transform its stock exchange into a strong, internationally competitive investment platform.
In 2018, Saudi Arabia also introduced the Fintech Saudi initiative, helping the Kingdom emerge as a leading fintech hub in the Middle East by fostering innovation and expanding digital payments.
SAMA has played a critical role in these initiatives, implementing progressive regulations, including a regulatory sandbox for supervised testing of advanced technologies and specialized licenses for fintech businesses.
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