Payment systems in Saudi Arabia

November 2003

Foreword

The Committee on Payment and Settlement Systems (CPSS) periodically publishes - under the aegis of the Bank for International Settlements (BIS) - reference works on payment systems in various countries, widely known as Red Books. The CPSS has also invited the central banks of a number of countries where important developments in payment systems are under way to publish - in collaboration with its Secretariat at the BIS - separate volumes on their respective payment systems. The present volume, the second edition of the Red Book for Saudi Arabia, is a further step towards increasing our understanding of the way payment systems work in different countries. This volume aims to portray the significant steps taken by the Saudi Arabian Monetary Agency in promoting safe and efficient payment systems in the Kingdom of Saudi Arabia.

Properly functioning payment systems enhance the stability of the financial system, reduce transaction costs in the economy, promote the efficient use of financial resources, improve financial market liquidity and facilitate the conduct of monetary policy. In recent years, issues relating to the economic efficiency and financial risks of all types of payment systems have come to the fore.

Central banks have a strong interest in promoting safety and improving efficiency in payment systems as part of their overall concern with financial stability. They play a key role in domestic payment system development and, in many cases, operate large-value payment systems. A number of central banks have been influential in improving public understanding of the payment and settlement arrangements in their countries.

We hope this volume will contribute to the general understanding and awareness of payment systems in Saudi Arabia, both domestically and internationally.

Tommaso Padoa-Schioppa Hamad Saud Al-Sayari
Chairman, Governor
Committee on Payment Saudi Arabian Monetary Agency
and Settlement Systems Kingdom of Saudi Arabia