X hits on this document

33 views

0 shares

0 downloads

0 comments

15 / 16

also recently entered into bank assurance whereby they have entered into joint-venture agreements with some of the leading insurance companies to provide distribution of jointly-labeled insurance products through their branch networks. Also, recently the Saudi

authorities specialized

have licensed two leasing leasing companies and

companies which are

Saudi

Banks.

With

joint ventures including major the new Capital Market and

Insurance provision

Laws, Saudi banks will compete with non-bank of these services. This will lead to rapid growth and

financial institutions in the expansion of these sectors.

Another important area of growth for Saudi banks is non-interest (Islamic) banking services, the demand for which has grown rapidly in recent years and now account for over 17% of the total assets of the Saudi banking system.

Foreign Banks’ Participation.

Saudi Arabian financial system has always been

open to foreign presence. The government has trade, investment and economic relations and

encouraged this to promote competition,

to

attract

expertise

and

technology.

It

already has considerable foreign investor presence as eight of the substantial foreign ownership. Many of the foreign partners in Saudi

eleven banks have joint venture banks

have technical management agreements. number of GCC banking institutions, as

In past three years, Saudi Arabia has licensed a a result of the decision of the GCC Summit to

permit

reciprocal

opening

of

their

banking

markets.

General

and

specific

criteria

have

been developed for assessing the application of new banks both from GCC and this connection, Gulf International Bank of Bahrain has been granted a September 2000 to open a branch in Saudi Arabia. This was followed by grant

outside. In license in of a branch

license to the Emirates Bank International, the National Bank of Kuwait Bank of Bahrain. These banks are likely to commence operations Applications from other foreign banks are also being considered.

and in

the National near future.

Other Infrastructure Developments. Some of the other institutional developments with implications for the future of the financial sector which are worthy of note are as follows:

The Saudi Credit Bureau: since the 1970s SAMA had recognized the need for a suitable infrastructure for the provision of customer related information to support the credit decisions by banks and financial institutions. In this regard SAMA has established and operated a Saudi Credit Information Centre for major banking customers, in 1981. This permitted Saudi banks to collect and

share

information

total

borrowings.

on their major customers and to be aware Following banking problems, in 1987

of such customers’ SAMA permitted

banks to share This exchange

and exchange information on of information enabled banks

their large delinquent customers. to collectively exert pressure on

such customers for banks to develop

the benefit of all a central system

banks. Also to maintain

in 1994, SAMA permitted information on delinquent

borrowers in the retail sector. borrowers to obtain credit from information systems are being

This system was helpful in preventing such more than one bank. In 2003, these credit further supplemented by a classical credit

Document info
Document views33
Page views33
Page last viewedFri Oct 28 18:20:25 UTC 2016
Pages16
Paragraphs378
Words6669

Comments