RIYADH: Saudi Arabia’s Cabinet on Tuesday gave its nod to the Kingdom’s finance minister to issue licenses for the country’s first digital banks, the Saudi Press Agency (SPA) reported.
“The finance minister will issue the necessary licenses for STC Bank and Saudi Digital Bank, both under establishment,” the report said, quoting a Cabinet statement.
First, STC Pay will be converted into a local digital bank, STC Bank, with a capital of SR2.5 billion. Second, a number of companies and investors, led by Abdul Rahman bin Saad Al-Rashed and Sons Company, will establish a local digital bank, Saudi Digital Bank, to conduct banking business in the Kingdom, with a capital of SR1.5 billion.
The Cabinet approved the proposal during a virtual meeting chaired by King Salman, it said.
Finance Minister Mohammed Al-Jadaan said on Twitter that the cabinet’s approval is in line with the Saudi Financial Development Program, which is part of the Kingdom's massive economic reform plan known as Saudi Vision 2030.
These objectives seek to develop a more efficient digital infrastructure, while encouraging entrepreneurship and creating job opportunities in the financial sector, he said.
Saudi Arabia’s Vision 2030 goals include developing the digital economy and enabling financial companies to support the growth of the private sector.
Last year, the Saudi Central Bank (SAMA) licensed 16 financial technology companies to provide payment services, consumer microfinance, and electronic insurance brokerage.
Similar digital banks had earlier been launched in the United Arab Emirates and Bahrain.