Monday, January 7, 2008

Banks in Saudi Arabia

I had mentioned clearly in an earlier post on the fundamental reason why an expatriate is here in the first place. I would now like to elaborate on the Banking System in Saudi Arabia. Opening a bank account is not an easy process #-o It requires the approval of your sponsor and an introduction letter from him. You will also have to submit copies of your residence permit (Iqama) and your passport which should have been attested by your sponsor #:-S Bigger companies usually transfer their salaries directly to the account, while smaller contracting companies make a cheque payment. Of course, there are also those rogue sponsors who don't pay their employees for months together X( but I will cover that in another post.


Banks in the kingdom do not pay any interest for the amount you keep in the account. Of course, they charge you a hefy interest if you take a loan from them. It's just that they don't call it as 'interest' but prefer to call it as 'Service Charge' :)) This is all the more reason why you must keep a bare minimum amount as balance in your account. Typically, it should be equal to a one-way air fare back home for you and your family. Keep the rest of the money with you as cash, or better still, send it immediately back home.


If you have an account in a bank, you will normally be issued a debit card. Make sure that you NEVER EVER use the debit card issued by your bank in the ATM Teller Machine of another bank :-O There are simply innumerable instances of expatriates being caught in unimaginable circumstances. If your ATM machine 'swallows' your card, or worse still debits from your account but does not issue any cash, at least the process of retrieving your card and money from your bank becomes a shade simpler if you had used your own bank's ATM. The settlement period is usually not less than 15 days #-o


Before leaving on vacation, never ever use your ATM to withdraw cash. It would be safer to go to your bank, use a withdrawal slip and take your money. If your card gets stuck or your money is debited without issuing cash, you don't even have time to go and lodge a complaint with your bank, so be safe.


There are many remittance centers in Saudi Arabia. All of them charge a small premium as service charge, irrespective of the amount you send. There is no upper limit on the amount you can send, but for bigger amounts banks normally ask for a salary certificate from your sponsor. Before sending money home, enquire about the exchange rate in a couple of remittance centers. You would end up with a hole in your pocket if you go to a bank / remittance center which offers you a rock bottom rate.
To be on the safer side, try not to send too much money in one transaction. There are cases where it has taken more than a week for the money to reach home, even though you had sent it by "Express" service (:

Most big shopping outlets in the kingdom accept debit cards issued by local banks. If the transaction amount is big, please ensure that you have a copy of the transaction slip. Instances of your account being debited twice are not uncommon :-SS I may sound rather pessimistic, but I have to also be realistic! As long as things are going on smooth, there's no problem. The moment you have a problem, with some good luck it would get settled in a few week's time ~X(


The whole problem is that there is no ombudsman for the banks here and hence no accountability by the staff either. First of all you wouldn't know whom to complain to and you cannot fight for your rights. You don't have them anyway. In the unfortunate event of your money being debited twice, it becomes YOUR responsibility to prove that there has been only one transaction. It's no joke, it happened to me :(( Luckily my bank credited the amount, but the ordeal I underwent before this was terrible.


I would also advise you not to take any credit card from any of the banks in the kingdom. It would be better to take an international credit card in your home country. You never know the fine print and courtesy is the last thing to expect from the staff, particularly from bigger banks.

Finally, ensure that dealings with your bank are a bare minimum. Typically, I would use them only as a transit point for my money before being sent home :D Afterall, the best day of the month is Pay Day!

15 comments:

Carol said...

Hi! I have read through your entire blog and while I may not totally agree with all of your postings and information, overall I commend you for what you are doing and the information you are presenting.

Naturally depending one where one is coming from and what one is doing, we will all have differing perspectives and experiences of life in the Kingdom.

Keep up the work!

American Bedu
http://delhi4cats.wordpress.com

Expatguru said...

Thanks for visiting my blog Carol and for your comments. What I write here are purely my own experiences as an expatriate. I am not an expert in Saudi law and I don't claim to be one. These are purely my own opinions, as everyone is entitled to one, and are based on my own experiences as an expatriate.

I started this blog just as a hobby, but never knew that it would receive such an enormous amount of support, so I just keep continuing. Thanks once again for your positive comments, and please do keep visiting this blog.

Anonymous said...

Hi, very helpful info guys!
I am in the UK currently and have been offered a senior position in a large private company in the automotive industry based in Dammam, though requires extensive travel throughout the kingdom. Have never been to the kingdom. I would greatly appreciate any info but in particular the following:
turnaround time on a re-entry visa, feasibility on living in Barhain and working in Dammam, family would stay in the uk for first year, so favoured areas to live and socialse and general interation with likeminded etc if chose to live in Saudi. Thanks a million in advance

Expatguru said...

Anonymous,

Congrats on your new assignment. Despite all the negative publicity, Saudi is not a bad place for expatriates as long as you follow the rules and of course, be careful and don't flaunt.

Please go through my entire blog to answer all your questions. You may just click on the drop down menu on the right hand side and when you choose a particular month, the topics would appear belowautomatically. Do let me know if you still have any queries and I will try to answer them to the best of my ability. Good luck with your new job.

Anonymous said...

Hi,

I don't know if you can help but not bad to ask on this forum. I used my Debit Card in one ATM (not of my Bank) and account was debited without dispensing 3000 SR cash. Now after 4 months of calling and visiting customer service of my bank thinking to complain SAMA but don't know how to approach. If any body can help. Thanks!

Expatguru said...

Thanks for visiting my blog, Anonymous. As mentioned in my post above, there just isn't any ombudsman where such disputes are settled. Even if you want to approach SAMA, only a Saudi can do so as expatriates are not entertained (it happened to my friend once). Sadly, you may have to just forget your amount.

Nats said...

So nice keep writing

Anonymous said...

Hi friend! I would like to ask if I depart to K.S.A as AutoCadd Operator. It is possible to bring my wife after? Do you think i up to the level they required for family statuship??Thanks in advance! and Keep Helping So the blessing maybe given to you in more fold. Thanks Again

Expatguru said...

No, anonymous. Any kind of "Operator" cannot sponsor his family. Think twice before coming, if you want to bring your family.

Anonymous said...

Regarding the non-dispensing of cash through ATM though debited , I too had the same experience twice.Fortunately, the bank after many follow ups were kind enough to credit it back.
Sometimes, I wonder luck really count here in KSA.

Expatguru said...

Anonymous,

What do you mean they were "kind enough to credit it back"? It is your hard-earned money and they have no business to keep your money with them. You were just lucky to get your money back!

Anonymous said...

Dear Expat Guru,
I have recently opened bank account here. There is a spelling mistake in my name in English. When i realized that and when i went to bank for correction bank executive said that i should not worry as in arabic it is correct. I requested to correct it but he didnt correct it in english. Can i face any problem with this later on. please advice.
Thanks & Regards
Murtuza

Expatguru said...

Murtuza,

Get an introduction letter from your company and give a request in writing to your bank to change your name correctly. It is your right and it is the bank's obligation to change it.

Anonymous said...

hi expat guru,
I worked for MOH for 5 years, suddenly and without prior notice, I got terminated from work..because of the saudi nationalization program..I still have remaining 6 months to pay for my loan on my bank?so what will i do the? i have no more capacity to pay because I have no more work..I had to stop work from the day they informed me..I don;t know the bank policies for loans..thanks..

Expatguru said...

Anonymous,

If they have terminated you without notice, it is illegal. They have to give you at least 1 month notice in writing. This apart, please go and meet your bank manager with a copy of your termination notice. Banks have insurance which protect them in such cases. This should be treated as a Force Majeure by your bank and hence you will be relieved of repaying any further instalment. But before you do that, please withdraw whatever money you have in your account, because it will be frozen. Good luck.