Saudi local banks are not allowed to create accounts for businesses engaging in illegal operations, according to the Saudi Central Bank (SAMA). The Central Bank also mandated that banks warn consumers of account freezes at least 30 days prior to the date of the freeze.

These requirements are stated in the revised Bank Account Rules, which became required on February 2 and will be implemented by Saudi banks.

The fourth update of the regulations for creating bank accounts and the basic rules for their operation in commercial banks operating in the Kingdom has been replaced by these rules.

Banks would be able to conduct outgoing remittances and sold check transactions exclusively with accountholders under the new guidelines.

The restrictions prohibit banks from creating bank accounts for investment businesses, investment funds, international financial institutions, including Gulf investment companies or their intermediaries, who offer their goods unlawfully in the Kingdom and collect money in Saudi riyals and foreign currencies.

Saudi banks are also prohibited from assisting such illegal firms in any manner. There are few exceptions, such as the types of entities that the Saudi Capital Market Authority allows to invest in Saudi joint stock firms' shares.

SAMA has requested that all Saudi national banks submit a statement to the Central Bank at the end of March each year, in accordance with the timetable provided. This statement must include an inventory of unclaimed accounts and abandoned accounts whose owners have been identified.

The statement shall be in line with the kind and category of accounts, as well as account numbers, as of the end of December of the previous year, without specifying personal information.

The Central Bank emphasized that such unclaimed and abandoned accounts must be subjected to an internal audit program once every two years, with a report filed to the audit committee, as long as the yearly audit program is not linked to any other periodic programs involving the accounts.

Saudi banks now have the power to freeze an account if the validity of the official labor contract has expired or if the banking data has not been updated, as well as if financial and personal information and account contacts have not been submitted.

The laws also prevent banks from allowing customers to conduct personal banking transactions with their accounts after the validity of their ID has expired, unless they renew it or update their "know your customer" data.

Deposits of any type, including inbound local and international transfers, shall be excluded. Exemptions will also be granted to government personnel whose wages are paid through banks but whose accounts have been suspended or who have been unable to furnish national identity cards owing to legal issues.

Employees with expired IDs will be given a grace period of 180 days from the date of expiration or the last date for updating.

According to the rules, banks are obligated to establish an account for any client who makes such a request, provided that the consumer submits all relevant paperwork and meets the account opening requirements.

The banks must agree to open the account without imposing any deposit requirements at the time of account opening. The banks are required to cancel the account if no funds are deposited within 90 days of the account being opened.

There will be an exception for government agency accounts, which will be opened with the consent of the Ministry of Finance and will not need any deposits for the time decided by the ministry.

Individuals' bank accounts must be opened when they approach banks escorted by security personnel linked with the General Administration of Prisons, according to the guidelines.

The banks must acquire a letter from the prison administration in the city where the jail is situated, addressed to the bank branch, stating the prisoner's name, ID or iqama number, and purpose to create an account from the guards.

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