Regulation on Branch Network

SAMA will review the Branch Network Policy to grant it's no objection. While evaluating the Branch Network Policy of a Bank, SAMA will review, inter alia, the following: a) Bank's plan for offering financial services through digital modes and timeline for their roll out; b) Results of any customer feedback survey conducted and/or Mystery Shopping done to assess the customer satisfaction and quality of banking services; and c) Any other measures taken to increase the outreach of financial services and offering basic banking services in priority areas. 5.6 Banks will review (and update, if required) the approved Branch Network Policy every three years (or more frequently, if so required) to ensure its consistency with the relevant regulatory processes and prevailing market dynamics. The revised Policy after review and approval by the Board of Directors or the delegated committee of the Board (in the case of branches of foreign banks, by the Chief Executive or a duly authorized senior executive at Head Office) will be submitted to SAMA within 30 calendar days of its approval. 6. Licensing of Branches 6.1 Banks are required to obtain approval for license from SAMA for a new branch, service center or remittance center (both within the Kingdom and overseas). SAMA's prior approval for opening of a branch abroad will be required before approaching the concerned host supervisor/regulatory authority for any such approval. 6.2 Banks will submit the proposal for obtaining license of a new branch, service or remittance center to SAMA as per their approved Branch Network Policy. The proposal should contain all relevant information on the proposed branch/center including name of the city, tentative location, zone of location, brief justification for choice of the city/location, and feasibility study (including projected business/financial impact). 6.3 Banks are required to use inactive licenses for branches/service centers/remittance centers before approaching SAMA for the new licenses. 6.4 SAMA's prior approval for a new branch, service or remittance center will not be required if such branch/center is being opened within the same zone by using the inactive licenses for branches/service centers/remittance centers. Furthermore, SAMA's prior approval will also not be required if a new branch, service or remittance center is being opened in any of the smaller zones by using the inactive license of a branch/service center/remittance center of a larger zone. However, in such cases, banks will approach SAMA at-least two months in advance for amendment of the inactive license for opening the proposed branch or center at the new location. 6.5 Banks will not be required to submit Annual Branch Expansion Plan (ABEP) to SAMA once their Branch Network Policy is approved. 6.6 Banks are expected to play their role in increasing outreach of financial services to the priority areas as a part of their corporate social responsibility. 7. Opening of Branches 7.1 After receiving approval for a new branch license from SAMA, banks shall finalize the branch location, seek necessary approvals from the concerned government authorities, construct the branch and make all other arrangements to open the branch. 7.2 Once a branch is ready to commence operations, banks shall obtain a formal license from SAMA for opening of the approved branch. The request for obtaining such a license will contain all relevant information about the readiness of the bank to open the branch and will be submitted only after all necessary arrangements (as detailed in Point 7.3 below) for opening of the branch are in place.