This section covers private associations licensed by the Ministry of Human Resources and Social Development (MHRSD) to carry out different activities, including their branches, as well as Da’wah (invitation to Islam) offices and the like. Bank accounts for these associations and offices shall be opened in Saudi riyal only. The following requirements and controls shall be met and applied:
a. Requirements and controls for opening and managing main bank accounts:
- Requirements for opening main account:
1. A copy of the license issued to the association by the Ministry of Human Resources and Social Development (MHRSD) to practice the activity for which a bank account is to be opened, or a copy of the approval of His Majesty the King where the entity is approved as per a royal order.
2. A copy of the association's bylaws, attested by the MHRSD or one of its branches.
3. A copy of the decision to form the association’s board and appoint officials, which is issued by the MHRSD.
4. A copy of the board’s authorization, which specifies the Saudi persons authorized to open and manage the association’s bank account; such authorization shall allow for joint signature by two officials. One of them should be the board chairman or vice-chairman, and the other should be the financial officer/corporate treasurer. The financial officer shall be the
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principal signatory. Should the board wish to authorize person(s) other than those mentioned above, the approval of the MHRSD shall be obtained.
5. Copies of national IDs of board members and of Saudi persons who are authorized to open and manage the bank account, provided that such copies are attested by the association.
6. Approval of the manager of compliance department at the bank for opening the account.
- Controls for managing the main account:
1. Only one main account may be opened in each bank for each association in the name stated in its license.
2. Deposits in the main account may only be accepted if it is from inside Saudi Arabia whether in cash, checks or domestic transfers upon ensuring that all data in the forms to be processed are complete and after verifying the full data, including the address, of the depositor or transferor by the bank employee. Cash donations or donations made via banking services to the bank accounts of associations may be accepted as long as these donations come from banking sources inside Saudi Arabia only, through which donor’s information can be retrieved.
3. Payment from the main account may be made only under dual control of the persons authorized to manage the account.
4. If disbursement is made by a check, the check shall be payable to the first beneficiary.
5. Transfers may be made to the bank accounts of beneficiaries of charity inside Saudi Arabia only. The transfer forms shall be filled in by the persons authorized to manage the account. In addition, the transfers shall be monitored by the bank to ensure that they go in line with the nature of the association’s activities.
6. ATM cards and/or credit cards shall not be issued for such accounts.
7. Checks drawn only by the first beneficiary may be collected through the clearing system between banks operating in Saudi Arabia only.
8. No transactions (e.g. remittance, collection of checks, etc.) from the association’s accounts to any beneficiaries outside Saudi Arabia shall be made, except for transferring money for the purpose of managing the association’s activities. For example, remittance for paying fees of consulting services or of participation in external symposiums, conferences and the like may be made after the bank obtains the official approval therefor from the MHRSD and the supervisory authority.
9. Remittances or checks coming from outside Saudi Arabia to the association’s account at the bank (or coming to other banks operating in Saudi Arabia via the bank) shall not be accepted, unless written approval therefor is obtained from the MHRSD and the supervisory authority.
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10. Sub-accounts may be opened for investing the private association’s funds that exceed its needs in activities with financial returns that would help the association achieve its objectives. To do so, the bank must first obtain and review the association’s rules that govern the investment of its surplus funds, which are approved by its general assembly and the MHRSD.
b. Requirements and controls for opening and managing sub-accounts for sub- activities and branches:
1. Where there are multiple activities or branches of the association and should the association wish to open several accounts for those activities or branches, sub-accounts may be opened under the main account upon obtaining the approval of the MHRSD and the supervisory authority for establishing such a branch, with no need to license the activity.
2. Sub-accounts of activities and/or branches shall be used only for receiving deposits, transfers and donations. Withdrawals or transfers from such sub- accounts shall not be permitted, unless made to the main account. The only exception to this restriction is when withdrawals and transfers are made for activity-related purposes. Moreover, no checks may be issued for such sub- accounts.
3. Documents and papers for opening and managing the main account shall suffice for the main account and its sub-accounts designated for various activities and branches. Funds of sub-accounts can be used only through the main account.
c. Requirements and controls for opening and managing sub-accounts for expenses:
One sub-account may be opened in Saudi riyal for each of the association’s branches that operate inside or outside the city where the association’s headquarters is located. Such sub-account shall be used only for "expenses", transferred to it from the main account. The following requirements and controls shall be met and applied:
- Requirements for opening sub-accounts for expenses:
1. Approval of the MHRSD for opening a sub-account for expenses.
2. A copy of the approval of the MHRSD and the supervisory authority for establishing the branch for which a sub-account is to be opened.
3. A copy of the association 's bylaws.
4. A copy of the decision to form the association’s board and appoint its officials.
5. Approval of the MHRSD for forming a committee of working members to supervise the association’s branch.
6. Approval of the MHRSD for the Saudi persons authorized to manage the association’s bank account (with joint signature). The persons authorized to manage the account shall not be changed without obtaining the approval of the MHRSD therefor.
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7. Copies of the IDs of the members of the committee supervising the branch’s activities, including persons authorized to open and manage the branch’s account. Such copies shall be attested by the head office of the association.
- Controls for managing expense sub-accounts:
1. Only one expense sub-account may be opened for each branch of the association, regardless of the number of the branch’s activities, programs and services and regardless of the branch’s other sub-accounts in other banks.
2. The branch’s expense sub-account is considered a subordinate account under the main account of the association.
3. The branch’s expense sub-account shall be named “Branch of...
Association/Office in (City)–Subaccount of Periodic Advance”.
4. The expense sub-account shall be opened in the same bank where the association’s main account is opened.
5. Deposits in the expense sub-account shall be limited only to funds received from the main account of the association under a check, bank transfer, etc.
No deposit of any funds in the expense sub-account shall be accepted other than the periodic expenses coming from the main account.
6. Disbursements from the expense sub-account shall be limited to the following:
Personal and bank checks withdrawn only by the first beneficiary.
Transfers made to the bank accounts of beneficiaries of charity inside Saudi Arabia only. The transfer forms shall be filled out by the persons authorized to sign for the advances’ account. In addition, the transfers shall be monitored by the bank to ensure that they go in line with the nature of the branch’s activities.
Paying salaries of the association branch’s staff.
Paying utility bills and government invoices.
7. ATM cards and/or credit cards shall not be issued for the expense account.
8. Approval of the manager of compliance department at the bank for opening a sub-account for expenses.