Article 24 of the Saudi Banking Control Law
المادة 24 من نظام مراقبة البنوك
The article makes the bank's board chairman, managing director, members, head office manager and branch manager responsible, each within his jurisdiction, for the bank's violation of the law's provisions and decisions and rules.
Official text (Arabic)
This article has not been amended since the law was issued.
يكون كل من رئيس مجلس إدارة البنك وعضو مجلس الإدارة المنتدب وأعضاء مجلس الإدارة ومدير المركز الرئيسي ومدير الفرع مسئولا - كل في حدود اختصاصه - عن مخالفة البنك لأحكام هذا النظام أو القرارات والقواعد الصادرة تنفيذا له.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 24 explained in plain English
A bank is a legal person, but its decisions are made by natural persons. This article therefore identifies who bears responsibility for the bank's violations.
Those responsible:
- the chairman of the bank's board of directors;
- the managing director on the board;
- the board members;
- the head office manager;
- the branch manager.
Scope of responsibility: each is responsible within his jurisdiction. A branch manager, for example, is held accountable for what falls within his jurisdiction, and does not necessarily bear every violation that occurs at head office, and vice versa.
Subject of responsibility: the bank's violation of the provisions of this law, or of the decisions and rules issued under it.
This article comes after Article 23, which sets the penalties, and shows who is held accountable for violations the bank commits. The article does not detail how responsibility is proved or divided among these persons, and the committee provided for in Article 25 has jurisdiction to decide violations.
Anyone who holds one of these positions and wishes to know the limits of their responsibility may consult a lawyer specialized in banking and finance.
Practical example
It turned out that a bank branch in Makkah gave a customer facilities in violation of the rules issued by the Agency, by a decision of the branch manager within his powers. The branch manager is responsible for this violation within his jurisdiction, and other leaders may be held accountable if the matter fell within their jurisdiction.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 24 of the Saudi Banking Control Law
Who is responsible for a bank's violations of the Banking Control Law?
The board chairman, the managing director, the board members, the head office manager and the branch manager, each within his jurisdiction.
Is a branch manager held accountable for all of the bank's violations?
Responsibility is within the jurisdiction of each person, so he is held accountable only for what falls within his jurisdiction.
Does the responsibility cover violating the Agency's rules?
Yes. It covers the bank's violation of the provisions of the law or the decisions and rules issued under it.
More articles on Bank Boards and Managers
- Article 9
The article bars a bank from lending or guaranteeing against its own name, or without security to its directors, auditors and their related businesses, or to employees beyond four months' salaries.
يحظر على أي بنك أن يزاول الأعمال الآتية: 1 - أن يعطي بضمان اسمه قرضا أو أن يمنح تسهيلات ائتمانية أو أن يقدم كفالة أو ضمانا أو أن يتحمل أي التزام مالي آخر. 2 - أ
- Article 12
The article bars sitting on the boards of more than one bank, requires the Agency's approval to appoint anyone who worked in a liquidated banking business or was dismissed from one, and deems a bankrupt or dishonor-convicted director resigned.
لا يجوز أن يكون الشخص عضوا في مجلس إدارة أكثر من بنك واحد. ولا يجوز إلا بموافقة كتابية سابقة من المؤسسة أن يختار عضوا في مجلس إدارة أي بنك أو أن يتولى وظيفة مدي
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.