The regulation of banking in Saudi Arabia

Since 1966, the Saudi Arabian Monetary Agency (SAMA) has regulated all banking activities in the Kingdom of Saudi Arabia. The banking control law, under which SAMA was authorized, defines what is meant by banking, and it regulates the organization and operation of banks. It also dictates deposit and liquidity ratios through SAMA. A certain percentage of any bank's deposit obligation must be deposited with SAMA. The law establishes a cap on deposit obligations, and it limits banks from engaging in certain types of activities, such as trade. SAMA monitors extensively the financial condition of Saudi banks. It also wields enough power to enforce much of the banking control law. SAMA has played an instrumental role in the development of Saudi banking institutions.