Saudi Gazette report

RIYADH — Saudi Arabia’s central bank has submitted a new banking draft law to legislative authorities, marking a significant step in strengthening the Kingdom’s financial regulatory framework, according to the International Monetary Fund’s (IMF) Article IV Mission report for 2025.

The IMF noted that the new Banking Law has been submitted for legislative approval, a risk-based supervisory framework is being refined, and a monitoring system has been introduced for large construction and infrastructure projects.

Additionally, the Saudi Central Bank (SAMA) is operationalizing its bank resolution function and has made good progress in establishing a crisis management framework that includes an emergency liquidity assistance framework, which the IMF said should be completed without undue delay.

Improvements in enhancing the effectiveness of anti-money laundering and counter-terrorism financing (AML/CFT) supervision — including through thematic inspections — were also welcomed.

The Article IV assessment affirmed the resilience of the Saudi economy, citing steady non-oil GDP growth driven by private investment and consumption, low inflation anchored at 2.2 percent, and unemployment levels below Vision 2030 targets.

The banking sector was highlighted for its strong capitalization, with a solvency ratio of 19.6 percent at the end of 2024, record-low non-performing loans since 2016, and solid profitability indicators.

SAMA is also reviewing its prudential toolkit to address risks from rapid credit expansion and has introduced a 100-basis-point countercyclical capital buffer to safeguard financial stability.