Introduction: Examining Saudi Arabia’s Banking Law Changes and Their UAE Relevance
Over the last decade, the financial and banking landscapes across the Gulf Cooperation Council (GCC) have transformed rapidly. Among these, Saudi Arabia has emerged at the forefront of regulatory innovation in banking. With the introduction of significant reforms to its Banking Law in 2024 and the anticipated implementation throughout 2025, Saudi Arabia seeks to modernise its financial sector and align with international best practices. For UAE-based businesses, executives, and legal practitioners, these reforms represent not just commercial opportunities but also substantial regulatory considerations extending across borders.
This advisory provides in-depth legal analysis and practical insights into the Saudi Banking Law reforms of 2024–2025, examining their impact on UAE entities and cross-border transactions. By comparing old and new regulations, exploring compliance requirements, and reviewing case study scenarios, this article aims to guide professionals towards best-in-class risk management and legal compliance strategies for 2025 and beyond.
Table of Contents
- Understanding the Regulatory Context of Saudi Banking Reforms (2024–2025)
- Overview of Saudi Banking Law Amendments: A Legal Breakdown
- Key Provisions: What Has Changed in 2024–2025?
- Impact on UAE Businesses and Cross-Border Transactions
- Old Versus New Law: Structured Comparative Analysis
- Case Studies: Real-World Applications and Compliance Scenarios
- Legal Compliance Risks and Practical Strategies
- Conclusion: Positioning for Proactive Legal Compliance in the UAE
Understanding the Regulatory Context of Saudi Banking Reforms (2024–2025)
The Regional Imperative for Modernised Banking Laws
Saudi Arabia’s Vision 2030 places immense emphasis on expanding financial sector participation, supporting digital transformation, and enhancing transparency in financial transactions. In direct response, the Saudi Central Bank (SAMA), under Decree No. M/7 of 2024, unveiled sweeping changes to the Kingdom’s Banking Law.
For UAE-based legal practitioners and businesses with cross-border interests, understanding these reforms is crucial. UAE law—especially Federal Decree-Law No. 14 of 2018 on the Central Bank & Organization of Financial Institutions and Activities, as well as anti-money laundering (AML) regulations—intertwines closely with regional initiatives. Furthermore, the GCC’s move toward harmonisation of financial regulations means Saudi legal changes carry direct and indirect consequences for UAE entities.
Comparative Legal Environment: UAE Banking Law Framework
The UAE legislative framework is governed by the UAE Central Bank, with core regulations including Federal Decree-Law No. 14 of 2018 and associated Cabinet Resolutions. The UAE’s adoption of robust licensing, fit and proper requirements, digital banking rules, and stringent AML/CFT (combating the financing of terrorism) provisions, reflects its continued efforts to uphold international standards—a trend now mirrored by Saudi legislation.
UAE legal consultants must thus scrutinise how Saudi reforms create both regulatory risk and operational opportunity, as legal obligations become more closely aligned across the GCC.
Overview of Saudi Banking Law Amendments: A Legal Breakdown
Summary of Key Legal Documents
| Saudi Arabia | UAE |
|---|---|
| Banking Law Reform (Decree No. M/7 of 2024) | Federal Decree-Law No. 14 of 2018 on Central Bank & Financial Regulation |
| SAMA Circulars and Regulatory Guidelines (2024) | Cabinet Resolution No. 10 of 2019 (AML/CFT Regulations) |
| Future Implementation Guidelines (2025 rollout) | Central Bank Circulars (Digital Assets & FinTech rules) |
Major Reforms and Their Objectives
Saudi Arabia’s legislative amendments focus on:
- Modernising licensing and supervisory processes for banks and financial institutions
- Strengthening consumer protection measures
- Enhancing corporate governance and internal control requirements
- Aligning with the Financial Action Task Force (FATF) AML/CFT standards
- Facilitating fintech, digital banking, and cross-border financial services
Official Sources and Legal Authority
These changes derive authority from the Official Saudi Gazette and are enforced by SAMA, with regulatory guidance for international entities provided through bilateral GCC memoranda of understanding. Consultation of UAE regulatory materials is essential to fully appreciate the cross-border dimension of these reforms.
Key Provisions: What Has Changed in 2024–2025?
1. Licensing and Market Entry
The revised Banking Law introduces more explicit criteria and transparency for obtaining a banking license in Saudi Arabia. The shift emphasises due diligence, source-of-funds verification, and broader disclosure requirements.
- Old Regime: License applications were less prescriptive, and foreign entrants faced opaque approval processes.
- New Regime: Comprehensive licensing standards, published fit and proper criteria, and SAMA’s increased oversight of foreign stakeholders.
Consultancy Insight: UAE financial institutions with existing or planned Saudi operations must reassess application documentation, ownership structures, and compliance frameworks to ensure alignment with these new pre-approval hurdles.
2. Consumer Protection Measures
The 2024–2025 amendments mandate enhanced transparency, including nuanced rules around disclosure of fees, dispute resolution, and swift handling of customer complaints. Failure to comply can now incur substantial penalties.
- Examples: All customer-facing agreements require plain-language summaries; digital services must offer robust customer opt-out mechanisms.
Comparative Context: These changes echo parallel UAE regulations such as Cabinet Resolution No. 24 of 2020 on consumer protection in the banking sector.
3. Corporate Governance Reform
SAMA’s 2024 Decree raises the bar for corporate governance in Saudi-licensed financial entities—demanding enhanced board independence, expanded internal audit functions, and detailed whistleblower policies.
- Case Example: A UAE-headquartered banking subsidiary in Riyadh must now appoint a minimum number of independent board members and submit detailed governance documentation for periodic regulatory review.
UAE Relevance: This mirrors UAE Central Bank Circulars 2021-16 and 2023-04, which reinforced board accountability and internal controls post-2020.
4. AML/CFT and Financial Crime Compliance
One of the most significant updates is the harmonisation of Saudi AML/CFT requirements with FATF standards, mirroring strict compliance obligations found under UAE law. Enhanced requirements include:
- Stringent Know Your Customer (KYC) procedures
- Mandatory transaction monitoring systems
- Comprehensive record-keeping obligations
| Requirement | Saudi Law (2024) | UAE Law (2019–2023) |
|---|---|---|
| KYC Procedures | Enhanced KYC at onboarding and periodic reviews | Mandatory under Federal Decree-Law 20 of 2018 |
| Suspicious Activity Reports | Required within 24 hours of detection | Required under Cabinet Resolution No. 10 of 2019 |
| Sanctions Screening | Real-time cross-border screening systems | Central Bank-mandated regular screening |
5. Digital Banking and Fintech Integration
Saudi Arabia’s revised regulations establish a clear framework for digital banks and fintech operators—including licensing, risk management, data privacy, and cybersecurity mandates.
Practical Note: UAE-based fintech firms must now navigate SAMA’s licensing regime and abide by explicit Saudi cybersecurity standards, while parallel compliance is enforced by the UAE Central Bank via the Retail Payment Services and Card Schemes Regulation (2021).
6. Enforcement and Penalties
Failure to comply with Saudi reforms incurs heavier penalties—monetary fines, operational suspensions, and in severe cases, license revocation. Penalty scales are commensurate with GCC-wide penalty structures.
| Type of Violation | Old Penalty | New (2024/2025) Penalty |
|---|---|---|
| KYC Failure | Administrative warning | Fines up to SAR 5 million, possible revocation |
| Consumer Rights Violation | Unspecified reprimand | Fines, mandatory customer restitution, public disclosure |
Impact on UAE Businesses and Cross-Border Transactions
Legal and Operational Implications for UAE Entities
The legal adjustments introduced by Saudi Arabia have clear ripple effects for UAE businesses and professionals active in the Kingdom. Key impacts include:
- Additional due diligence obligations for UAE-headquartered banks with Saudi operations
- Necessity for updates to cross-border service agreements
- Alignment of compliance training and protocols with new Saudi standards
- Heightened exposure to enforcement action for failures in dual jurisdiction compliance
For example, a UAE fintech considering expansion into Saudi Arabia in 2025 must prepare to undergo dual regulatory review, adapt its product disclosures per SAMA rules, and implement tailored staff training to address both UAE and Saudi requirements.
Interaction with UAE Law: Dual Compliance Scenarios
Practical challenges arise where UAE and Saudi regulations differ in detail but align in principle. In these instances, firms must apply the stricter standard or seek legal advice on jurisdictional prioritisation—especially with respect to AML/CFT, data privacy, and consumer protection.
| Compliance Issue | Saudi Law | UAE Law | Consultancy Recommendation |
|---|---|---|---|
| Data Localisation | Mandatory for certain financial data | Sector-based data localisation requirements | Adopt Saudi law standard for cross-border transactions involving KSA customers |
| Board Composition | Minimum 2 independent directors | Flexible, guided by CBUAE regulations | Conform to stricter requirement where possible |
Old Versus New Law: Structured Comparative Analysis
Licensing and Regulatory Supervision
| Feature | Saudi Law (Pre-2024) | Saudi Law (2024/2025) | UAE Law |
|---|---|---|---|
| Bank Licensing | Case-by-case, limited transparency | Published criteria, open process | Published in Federal Decree-Law No. 14/2018 |
| Foreign Branch Access | Opaque approval; high barriers | Clarity and predictability for regional players | Regulated, clear guidance under CBUAE |
| Supervision | Post-licensing reviews mainly | Continuous supervision and inspections | Continuous, risk-based supervision |
Consumer Protection and Dispute Resolution
| Feature | Old Law | 2024–2025 Law | Comparable UAE Provision |
|---|---|---|---|
| Dispute Resolution | Bank-managed, ad hoc procedures | Mandatory ombudsman, digital complaints system | Central Bank-mandated frameworks (Circular 24/2020) |
Sanctions and Enforcement
| Violation | Saudi Law (Old) | Saudi Law (2024–2025) | UAE Law |
|---|---|---|---|
| AML Breaches | General reprimands | Severe financial penalties, public disclosure | Heavy penalties as per Cabinet Resolution 10/2019 |
Case Studies: Real-World Applications and Compliance Scenarios
Case Study 1: UAE Bank Operating a Riyadh Branch
Scenario: A UAE-incorporated bank with a Saudi branch must renew its license post-2024. Under the new Saudi law, the bank undergoes rigorous fit and proper reviews, submits enhanced board minutes for SAMA inspection, and faces random compliance audits.
Legal Advisory: The bank must allocate additional compliance resources, audit its customer data localisation protocol, and update staff training modules to reflect new SAMA mandates, in parallel to continued UAE Central Bank requirements.
Case Study 2: UAE Fintech Expanding into Saudi Arabia
Scenario: A licensed UAE payment app provider applies for a Saudi digital banking license. After application, it is subject to bespoke cybersecurity reviews, must certify its technology stack aligns with Saudi standards, and update its terms of service to address consumer rights now required under the new law.
Consultancy Insight: Early-stage legal project management and multi-jurisdictional counsel are a must for smooth entry and operational launch.
Case Study 3: Cross-Border AML/CFT Compliance Failures
Scenario: A UAE-based remittances provider is cited by SAMA for inadequate suspicious transaction reports on Saudi-resident clients, despite UAE-side compliance.
Risk Insight: Regulatory fragmentation risk: Local compliance in the UAE does not suffice for Saudi obligations. Firms must adopt layered compliance processes, harmonise policies, and enable real-time reporting between the two jurisdictions.
Legal Compliance Risks and Practical Strategies
Key Legal Risks of Non-Compliance
- Regulatory fines and reputational damage in both Saudi Arabia and the UAE
- Operational suspension or license revocation by SAMA
- Board-level liabilities and possible director bans
- Enforcement of mandatory consumer restitution requirements
Compliance Strategies for UAE Entities
| Action | Practical Guidance |
|---|---|
| Legal Audit | Conduct a dual-jurisdiction compliance audit led by UAE and Saudi legal counsel |
| Policy Harmonisation | Align corporate policies with the stricter jurisdictional standard |
| Training & Awareness | Update compliance and HR training with new regulatory requirements |
| Licensing Checklists | Utilise comprehensive checklists to track changing licensing prerequisites |
| Crisis Response Planning | Develop bespoke escalation procedures for Saudi-side regulatory inquiries |
Suggested Visual: A compliance checklist infographic, detailing key obligations under Saudi Banking Law reforms, mapped against parallel UAE standards. This tool should be showcased on your firm’s website to support client engagement.
Checklist: Essential Steps for Saudi-UAE Banking Compliance (2025)
- Review existing Saudi licenses and prepare for re-certification
- Re-assess AML/CFT control frameworks for dual-jurisdiction adequacy
- Update customer agreements and digital interface disclosures
- Test and certify data localisation and IT security compliance
- Re-train key staff and board members on new Saudi and UAE requirements
- Set up bilateral compliance monitoring for real-time risk mitigation
Conclusion: Positioning for Proactive Legal Compliance in the UAE
Saudi Arabia’s 2024–2025 banking law reforms mark a new era of regulatory harmonisation within the GCC. For UAE-based businesses and their advisors, this requires a proactive shift, not only to avoid penalties but also to position for competitive advantage in a modernised financial marketplace. The path forward calls for robust legal audits, close coordination between in-house and external legal teams, and the adoption of best-in-class governance practices that match or exceed the most stringent requirements in either jurisdiction.
Anticipating further reforms—both in Saudi Arabia and the UAE throughout 2025—firms should embrace a culture of continual compliance, invest in dynamic training, and leverage expert legal guidance to future-proof their cross-border operations. Our consultancy recommends ongoing review of legal sources, subscription to regulatory updates from both SAMA and UAE Central Bank, and regular engagement with specialist counsel as the regulatory environment continues to evolve.
To discuss tailored compliance solutions for your UAE or GCC banking operations, please contact our legal advisory team for a dedicated consultation.