The Saudi Arabian Monetary Agency (SAMA), established in 1952, is the central bank of the Kingdom of Saudi Arabia.

History

The first Saudi currency law was issued in 1346H (1928) with the name of (Hejazi– Najdi Currency Law) under which the Arabian Riyal was minted with the size, weight and finess of the Ottoman Majidi silver Riyal, which was widely circulated at the time, to replace the latter as from the first of Shaaban 1346H. In 1354H (1935), the government decided to mint a new silver Riyal in the name of the Kingdom of Saudi Arabia, with the size, weight and finess of the Indian silver rupee.

Saudi Arabian Monetary Agency (SAMA) was established in the Era of King Abdulaziz, may Allah bless his soul, under two royal decrees issued on 25/7/1371H (20/4/1952). The first was No. 30/4/1/1046 provided for establishing the Saudi Arabian Monetary Agency, its venue in Jeddah, and opening branches in cities and places as deemed necessary. The second Decree No. 30/4/1/1047 provided for the approval of the Charter of the Saudi Arabian Monetary Agency, attached to the decree, and ordering its implementation. On 23/10/1371H (15/07/1952), Mr. Rasim Al-Khalidi was appointed as Vice Governor. On 14/11/1371H (05/08/1952), Royal Decrees Nos. 30/4/1/1743 and 30/4/1/1744 were issued, providing for the appointment of Mr. George A. Blowers (U.S. citizen) as the first governor of SAMA, and the formation of SAMA's first Board of Directors. SAMA began practicing its business in Jeddah on 14/1/1372H (04/10/1952).

On 26/01/1372H (16/10/1952), a Royal Decree was issued, ordaining the adoption of the Saudi gold sovereign as the official currency of the Kingdom. The first Saudi gold coin with the name of King Abdul Aziz was issued on 03/02/1372H (22/10/1952).

SAMA opened a branch in Makkah on 10/7/1372H (26/3/1953), followed by another one in Al-Madinah on 15/12/1372H (19/8/1953).

Mr. Rasim Al-Khaldi resigned from his office as Vice Governor as from 17/9/1373H (20/5/1954), and Mr. Ralph Standish was appointed as Vice Governor as from 10/1/1374H (7/9/1954).

For the convenience of pilgrims, and to relieve them from carrying heavy metal coins, SAMA issued pilgrim receipts (First Edition) of ten-riyal denomination on 14/11/1372H (25/7/1953). The second edition of the same denomination was issued on 15/9/1373H (18/5/1954). The first edition of five-riyal denomination was issued on 13/10/1373H (14/6/1954). The first edition of one-riyal denomination was issued on 23/11/1375H (2/7/1956).

A Royal Decree was issued on 22/2/1374H (20/10/1954) approving the resignation of the Governor, Mr. George A. Blowers, and the appointment of Mr. Ralph Standish as Governor. Mr. Ma'touk Hasanain was appointed as Vice Governor on 1/3/1374H (29/10/1954).

SAMA opened a branch in Al-Damam on 10/3/1374H (7/11/1954), another in Ta'if on 8/6/1374H (31/1/1955) and a third in Riyadh on 16/6/1374H (8/2/1955).

The Second Currency Law and the Currency Control Law were issued on 18/12/1376H (16/7/1957).

In 1376H, SAMA issued its first minted coins of one, two and four-qirsh denominations.

Due to the monetary and financial crisis faced by the Kingdom during the period 1375H-1377H, the Charter of SAMA was amended by Royal Decree No. 23, which was issued on 23/5/1377H (15/11/1957), emphasizing the autonomy of SAMA and entrusting the responsibility of its efficient administration to a board of directors to supervise its work and ensure its sound management. The board was assigned all necessary and appropriate powers for achieving this objective.

The Third currency Law was issued on 23/5/1 377AH (15/12/1957).

The Saudi gold sovereign in the name of King Saud was issued in 1377H (1958).

A Royal Decree was issued on 26/7/1377H (15/2/1958) appointing Mr. Abed Mohammed Saleh Sheikh as Vice Governor. Approval of the resignation of Governor Mr. Ralph Standish was issued on 28/7/1377H (17/2/1958).

A Royal Decree was issued on 29/2/1378H (14/9/1958), appointing Mr. Anwar Ali as Governor of SAMA as from 12/9/1377H (1/4/1958).

The Fourth (current) Currency Law was issued on 1/7/1379H (31/12/1959) authorizing the issue of the official paper currency, enjoying a legal tender status and full power to discharge all public and private debts and obligations. Under the Law, the right to print and mint the Saudi currency shall be the sole privilege of SAMA. The Law also provides for keeping a full cover of gold and convertible foreign currencies against the currency issued. The decimal system was also introduced under which the riyal was divided into twenty qirshes instead of twenty-two qirshes. The new Law demonetized the Saudi gold sovereign, the pilgrims receipts and silver riyals.

On 1/1/1381H (14/6/1961), official Saudi banknotes of 1,5,10,50 and 100 riyals denominations were put in circulation.

In 1381H, SAMA issued its first annual report covering the year 1380H and the first half of 1381H.

A Royal Decree was issued on 4/12/1382H (27/4/1963) appointing Mr. Juneid Abdul Qadir Bajuneid as Vice Governor.

In 1385H, SAMA's Institute of Banking (IoB) was established in Jeddah. Later on, it was relocated to Riyadh in 1399H.

The Banking Control Law was issued pursuant to Royal Decree No M/5 dated 22/2/1386H (11/6/1966).

The Council of Ministers issued a Resolution on 8/1/1392H (23/2/1972), approving minting of coins.

A Royal Decree was issued on 1/8/1392H (9/9/1972), appointing His Excellency Mr. Khaled Al-Qusaibi as the Vice Governor.

The Council of Ministers issued a Resolution on 13/7/1394H (1/8/1984) banning the issue of new commercial licenses for running money changing business, so that the competent authorities can scrutinize the status of money changing business. On 16/2/1402H (12/12/198I), the Minister of Finance issued a resolution regulating money changing business, assigning the function of supervision and control to SAMA. The resolution provided for full suspension of issuing new licenses, and limiting the practicing of money changing business to those who already have had a license from SAMA or a commercial license for practicing such business.

In order to meet the Saudi market's need for money changing firms for selling and buying foreign currencies, and to satisfy the need of heirs to continue practicing money changing business after the death of their predecessor, the Council of Ministers issued a Resolution on 8/1/1430H (5/1/2009), cancelling Article 1 of the Council of Ministers' Resolution which bans the issue of new licenses for money changing business.

A Royal Decree was issued on 12/11/1394H (26/11/1974) appointing Mr. Abdulaziz Al-Quraishi as the Governor, the first Saudi to occupy this position.

At the end of 1398H, the headquarters of SAMA was relocated from Jeddah to Riyadh.

Mr. Khaled Al-Qusaibi was retired pursuant to a Royal Decree issued on 8/5/1400H (25/3/1980), and H. E. Mr. Hamad Bin Saud Al-Sayari was appointed as the Vice Governor in accordance with another Royal Decree issued on the same day.

On 14/6/1403H (28/3/1983), a Royal Order was issued, relieving H.E. Mr. Abdulaziz Al-Quraishi from his post upon his request as of the 1st of Rajab 1403H. Another Royal Decree was issued on the same day entrusting the duties of the Governor to Mr. Hamad Al-Sayari in addition to his original post.

In 1405H (1984), a ministerial committee was set up from the Ministry of Finance, the Ministry of Commerce and Industry and SAMA, for regulating and developing the Stock Market. Furthermore, the tasks of operating and regulating the market daily business were assigned to SAMA. In the same year, the banks operating in the Kingdom, on SAMA's initiative, established a Saudi Company for registering Saudi Shares and related transactions.

On 16/12/1405H (1/9/1985), work officially started at new SAMA Headquarters.

On 16/1/1406H (30/9/1985), a Royal Decree was issued appointing H.E. Mr. Hamad Al-Sayari as the Governor of SAMA.

On 1/7/1407H (1/3/1987), a Royal Order was issued forming a committee of three competent members from SAMA to look into issues related to banks and their customers under the name "the Committee for Settlement of Banking Disputes".

On 22/10/1408H (6/6/1988), a Royal Decree was issued appointing H.E. Dr. Ahmad Abdullah Al-Malek as the Vice Governor.

In Ramadan, 1410H (April, 1990), SAMA established the Saudi Payment Network (SPAN), aiming at encouraging the use of E-transactions provided by the banking system.

A Royal Decree was issued on 28/2/1416H (26/7/1995) appointing His Excellency Dr. Ibrahim Bin AbulAziz Al-Assaf as the Vice-Governor. He remained in this position until 25/5/1416H (19/10/1995) where he was appointed as a state minister and a member in the Council of Ministers.

A Royal Decree was issued on 22/6/1416H (15/11/1995), appointing His Excellency Dr. Mohammad Bin Sulaiman Al-Jasser as the Vice-Governor.

The Saudi Arabian Riyal Interbank Express Electronic System (SARIE) was launched on 18/1/1418H (14/5/1997).

On 21/7/1420H (30/10/1999), His Excellency, the Minister of Finance issued a resolution entrusting SAMA with licensing, controlling and supervising financial leasing companies.

The supervision of insurance sector was entrusted to SAMA by virtue of a Royal Decree issued on 2/6/1424H (31/7/2003) approving the Cooperative Insurance Companies Control Law.

Effective from 13/5/1425H (1/7/2004), the supervision of the Stock Market was shifted to the Capital Market Authority (CMA) after the issue of a Royal Decree on 1/7/2004, appointing the board of CMA.

SADAD Payments System (SADAD) was launched on 19/8/1425H (3/10/2004). SADAD is an intermediary system between billers and the domestic banks, facilitating and accelerating e-payment process through all banking channels in the Kingdom, including ATM, phone banking, and online banking.

A Royal Decree was issued on 19/2/1430H (14/2/2009), appointing His Excellency Dr. Moharnmad Bin Sulaiman Al-Jasser as the Governor of SAMA as from 3/3/1430H (28/2/2009).

A Royal Decree was issued on 9/9/1430H (30/8/2009) appointing His Excellency Dr. Abdurrahman Bin Abdullah Al-Hamidy as the Vice Governor of SAMA.

A Royal Decree was issued on 18/1/1433H (13/12/2011), appointing His Excellency Dr. Fahad Al-Mubarak as the Governor of SAMA.

Functions

• Issues national currency, the Saudi Riyal;
• Acts as a banker to the government;
• Supervises commercial banks;
• Manages Kingdom’s foreign exchange reserves;
• Conducts monetary policy for promoting price and exchange rate stability;
• Promotes the growth and ensures the soundness of the financial system.

Internal Audit

Internal Audit is an independent appraisal activity within the Saudi Arabian Monetary Agency that reviews operations as a service to management. It is a managerial control that functions by measuring and evaluating the effectiveness of other controls. Particularly controls over computer systems that are essential to the Agency.

The objective of Internal Auditing is to assist all members of management in the effective discharge of their responsibilities by furnishing management with analyses, appraisals, recommendations and comments concerning the activity reviewed. Audit activities go beyond accounting and financial records to obtain a comprehensive understanding of the operations and automated systems under review.

The following are the professional standards with which SAMA internal auditors conduct their work:

• Independence –Internal Auditors are independent of the activities they audit;
• Professional Proficiency-Audits are performed with proficiency and professional care;
• Scope of Work-examination and evaluation of the adequacy and effectiveness of SAMA internal controls and quality of performance in carrying out assigned responsibilities;
• Performance of Audit Work-planning the audit/examining and evaluation information, communicating results to users and management, follow-up review;
• Management Internal Audit Activity–The chief audit executive should effectively manage the audit activity to ensure it adds value to the Agency.

Scope of Work:

• Safeguarding of assets by reviewing the means of accounting and verify the existence of such assets;
• Compliance review to ensure compliance with policies, plans, procedures, SAMA internal laws and regulations that could have a significant impact on operations and reports and should further determine whether SAMA operations are in compliance;
• Review the reliability and integrity of financial and operating information;
• Appraise the economical and efficient use of SAMA resources;
• Review all operations to ascertain whether results are consistent with established objectives and goals , and whether the operations are being carried out as planned;
• Review the SAMA management information systems.

Useful links

Currency of Saudi Arabia:

Saudi riyal

List of Central Banks:

Central Banks

Official website of Saudi Arabian Monetary Agency:

www.sama.gov.sa

National e-Government Portal:

www.saudi.gov.sa