New directives from the Saudi Central Bank (SAMA)
In a strategic move reflecting the Kingdom of Saudi Arabia’s commitment to enhancing financial inclusion and developing the banking sector, the Saudi Central Bank (SAMA) has issued crucial directives to all banks operating in the Kingdom. These directives aim to implement three key amendments to the regulations governing bank accounts held by inmates, allowing for greater flexibility in managing funds and enabling effective online banking services.
General context and historical background of the decision
These amendments come within the framework of the comprehensive digital transformation led by Saudi Vision 2030, specifically as part of the Financial Sector Development Program. Historically, the financial accounts of prison inmates were subject to strict regulatory controls, with transfers restricted to the inmate's own account or directed to the enforcement courts only, pursuant to court orders. This restriction posed a significant challenge for inmates in meeting their families' needs or managing their basic financial obligations. With technological and legislative advancements, regulatory bodies recognized the necessity of updating these rules to keep pace with modern requirements while maintaining the highest standards of security and compliance.
Details of bank changes to prison inmates' accounts
1. Flexible withdrawal and money transfer options
According to the recent amendments to Rule (200-1-1) of the Banking Accounts Regulations, the withdrawal mechanism has been modified to be more flexible. The amendments stipulate that withdrawals from the account may be made by checks signed by authorized signatories or by bank transfer. This significant change eliminates the previous limitation on beneficiaries and allows for unrestricted financial transfers to multiple parties, thus granting account holders greater control over the management of trust funds in accordance with the established regulations.
2. Diversifying financial deposit mechanisms
The directives also included streamlining deposit mechanisms into inmates' accounts. Relatives or family members of prisoners can now make deposits via bank transfer, direct cash deposit through bank branches, or even checks made payable to the prisoner. To ensure transparency, SAMA (Saudi Arabian Monetary Authority) stipulated that the beneficiary's information (name and ID number) must be provided, in addition to the depositor's information, including the bank name and IBAN.
3. Regulating bank cards and ATMs
The Saudi Central Bank confirmed that cash deposit services will continue to be available through ATMs located within prison facilities. To regulate this process, a dedicated cash deposit card is issued under the name "Prison - Inmate Deposits," and its PIN is provided to the prison director in their official capacity. Conversely, directives emphasized the prohibition of issuing regular ATM cards or credit cards to these accounts to prevent misuse.
Enabling online banking services
One of the most significant aspects of these amendments is the enabling of digital transformation for prison accounts. Banks are now authorized, at their discretion and with their approval, to provide internet and telephone banking services for executing financial transactions. This is done based on an official letter from the account holder. Previously, these services were limited to viewing balances and inquiring about transactions without execution authority. Now, accounts are capable of conducting full banking transactions, thus increasing the efficiency of managing inmates' trust accounts.
The importance of the event and its expected impact
This decision has far-reaching positive implications. Locally , it helps alleviate the psychological and financial burdens on inmates' families, making it easier for them to receive financial support from their loved ones inside prison smoothly and quickly through digital channels. It also reduces the administrative and paperwork burden on both prison administrations and banks.
At both the regional and international levels , this step highlights the Kingdom of Saudi Arabia's leadership in balancing the application of penal regulations with the preservation of the financial and human rights of inmates. Enabling prisoners to manage their finances digitally reflects a clear commitment to human rights principles and financial inclusion, and sets a model for developing legislative and banking infrastructure to serve all segments of society without marginalization.
