Islamic Finance

Saudi Arabia hands out two digital banking licences

Saudi Arabia has granted two digital  banking licences as the government continues to drive the use of tech across the financial sector.

STC Pay and a new firm to be formed by a number of companies and investors have been given the licences, the central bank said on Tuesday (June 22).

STC Pay is a subsidiary of telecommunication company STC Group, the biggest mobile operator in Saudi Arabia. It will form STC Bank that will hold capital of 2.5 billion riyals ($670 million).

The second firm, led by Abdul Rahman bin Saad Al-Rashed and sons Co., will set up Saudi Digital Bank and hold 1.5 billion riyals in capital.

The central bank in February last year issued additional guidelines and criteria for digital-only banks and it has since then been studying licence applications.

The Saudi government has identified tech, and fintech for the financial services industry, as an enabler for the Kingdom to keep pace with global developments and to drive economic diversification.

The central bank has granted licences to 16 fintech companies to provide payment services, consumer micro-finance and digital insurance brokerage.

There are also 32 fintechs operating under the regulator’s sandbox environment designed for testing services and products.

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