Hafiz denied reports that political turmoil in some Arab countries and anxiety among expatriates over the fallout of strict implementation of the Nitaqat program would not cause an increase in the volume of foreign remittances.
He also reaffirmed that the Kingdom’s banking sector is intact and secure. There is no cause for concern for credit card users and other account holders, Hafiz emphasized.
In this interview, Hafiz speaks at length about a number of key issues concerning the banking transactions of foreigners, especially in the wake of the Arab Spring and the new Nitaqat program that aims to create more job opportunities for Saudi nationals.
Following are excerpts from the interview.
Some expatriates in the Kingdom claim that they faced embarrassing situations over their bank accounts, especially at the time of renewal of their iqama (residence permit). Could you please comment on it?
Saudi banks do not differentiate between Saudi nationals or foreigners. According to local banking regulations, the procedures for freezing bank accounts are linked to the expiry of the validity of the IDs of customers. The local banks are keen to ensure the legality and trustworthiness of their accounts by ensuring that the customers hold valid official documents to prove their identity. Saudi banks follow a system of continuing to interact with customers and inform them about the date of freezing their accounts in case they failed to renew their ID. It is essential for customers to renew their ID and then report it to their banks to ensure that their accounts are in order. Customers should visit the concerned bank’s branch to update their banking details and personal information. This is the only option because such services are not available over the phone or any other way.
If an expatriate’s account is frozen because the iqama was not renewed on time, what are the procedures to withdraw money from his or her account?
The general rule that governs the dealings between banks and their customers is based on the possession of valid documents to establish their identity. This is clearly stated in the rules issued by the Saudi Arabian Monetary Agency (SAMA) for opening and operating bank accounts. Hence, it is obligatory for all local banks operating in the Kingdom to freeze the accounts of customers, both citizens and foreigners, if the validity of their ID or iqama had expired.
As for Saudi customers, their bank accounts would be frozen if they fail to renew their ID within 90 days of its expiry. For foreigners, SAMA regulations bind local banks to freeze all accounts after the expiry of the validity of the customer’s ID whether it is an iqama, IDs of diplomats or passports of GCC citizens. In their case, the accounts will be closed and the balance amount will be transferred to the unclaimed balance. This happens 180 days after the expiry of the ID’s validity. Similarly, all accounts of foreigners will be closed when they leave the Kingdom on ‘final exit’. However, they can withdraw the balance amount if they approach their bank and provide documents to prove their ‘final exit’.
Do you believe that the system of linking bank accounts to iqama’s validity and the complications in its renewal may cause any negative impact on foreigners’ transactions with banks and remittances to their respective countries?
Absolutely no. Saudi banks do not violate international banking rules and regulations in their dealings with customers. In this sense, it is mandatory for customers to update their personal data and to renew their IDs on time to keep their accounts active. It is also essential for customers to ensure that their personal data is up-to-date. The only solution to avoid any problems is to renew the iqama on time.
There were reports that the ‘Arab Spring’ has impacted on money transfers to various countries. Is there any recent increase in the volume of money transferred by Arab nationals living in the Kingdom to their respective countries?
So far, we have not noticed any unusual increase in the volume of money transferred by foreign workers. According to official data, the volume of foreign remittances in 2006 was about SR60 billion. But this amount jumped by SR40 billion to SR100 billion in 2011. A major reason for the increase is the robust growth of the Kingdom’s economy and its booming construction sector. Official data shows that there has been an increase of 34 percent in the inflow of foreign workers into the Kingdom between 2004 and 2010. This resulted in spurring the volume of foreign remittances. Political turmoil in some Arab countries does not have any impact on the transfer of money by the Arab nationals from these countries living in the Kingdom.
What about illegal transfer of money by foreigners through various channels other than banks. Can you estimate the volume of money sent out of the Kingdom in this manner?
We do not have any exact figure for such transactions that take place outside official banking channels. In some cases, some foreigners take cash with them while leaving the Kingdom. A recent order from the customs authorities stipulates that foreigners are allowed to carry cash or securities or precious metals worth SR60,000. They are required to declare any excess amounts to authorities.
Many foreigners believe that the Nitaqat program would reduce their chances of continuing to stay in the Kingdom. Therefore they might be keen to transfer their money home. How does this phenomenon affect the banks?
This notion on the part of most foreigners is the result of a misunderstanding about the goals of the Nitaqat program. The program is actually meant to get rid of unskilled foreigners who are unwanted while comparing the actual requirements of Saudi economy and the employment market. The government wants to replace such foreigners with qualified Saudi nationals. Foreigners working at companies under ‘red’ or ‘yellow’ categories are being given the option to transfer to companies in ‘green’ or above categories. I don’t think that such apprehensions would produce any negative impact on their deposits in the local banks.
Recently, bank customers have become increasingly concerned about the dangers of hacking. Are there any security measures to protect customers from such threats?
I would like to reaffirm that local banks apply the best practices and most acceptable international security measures to safeguard the transactions of credit card users and other account holders. All the local banks are maintaining compliance with the Payment Card Industry Data Security Standard (PCI DSS), which is a set of protective measures designed to help store, process and transmit cardholder data securely. Saudi banks have secured international licenses with regard to the procedures adopted by them to protect customer data.
As a result of this, Saudi banks have not been susceptible to any hacking attacks. Banks always warn their customers to protect themselves from fraud. In this respect, the Media and Banking Awareness Committee of Saudi Banks carried out three major nationwide awareness campaigns during 2009, 2010 and 2011. We are planning to organize the fourth campaign within a few weeks.
What is the role of the committee in strengthening interaction between banks and customers?
The committee strives hard to make use of all available means in achieving intimate interaction between banks and their customers. We recently launched a Facebook page entitled “Saudi Banks” as part of our long-term strategy to widen our presence on social networking sites. The committee, in coordination with STC and Mobily, sends text messages to all bank customers warning them against falling victim to any fraudulent practises and swindling. Also, the committee tied up with the General Authority for Civil Aviation in organizing an awareness campaign at airports by way of sending text messages to passengers.
