Chapter 6 Chapter 6 Central Bank's Transactions and Investments
Article (29) Permitted Transactions(a) The Central Bank may carry out any of the following transactions with financial institutions:1. Buy, sell, discount and re-discount bills of exchange and promissory notes.2. Buy, sell and otherwise in the government debt instruments.3. Buy, sell and otherwise deal in the assets mentioned in Article 19 (a) of this law.4. Grant credit facilities in the ordinary course of business and also the exceptional circumstances for the purpose of assisting financial institutions overcome any serious shortage of liquid money or any risk to their financial situation.5. Borrow money or any other assets.6. Open and maintain accounts for financial institutions and accept their deposits upon the terms and conditions to be determined by the Governor.(b) The Central Bank may perform the following:1. Act as agent or correspondent bank for foreign central banks, similar monetary institutions, foreign governments or their bodies or international financial institutions.2. Open accounts to any other person, except those mentioned in the preceding item, upon the approval of the Board in order to encourage participating in the financial activity of the Bank.3. Extend loans to its employees upon the terms and conditions stated in the regulations issued by the Board4. Do all such other acts that are ancillary, incidental or consequential to any of the transactions mentioned in this Article and as determined by the Central Bank.
Article (30) Investments
The Central Bank shall invest its capital and reserves according to the asset investment policies set by the Board.
The Central Bank may appoint one or more fund managers to administer its investments.
Article (31) Prohibited Transactions
Except as otherwise provided for in this law, the Central Bank shall not:(1) Engage in trade or participate in any financial, commercial, agricultural, industrial or other undertaking except for such activities as the Central Bank may deem necessary to achieve its objectives.(2) Purchase, or retain title to, real estate except for the conduct of the Central Bank's business and for the housing of its employees.(3) Advance unsecured loans.(4) Advance loans upon security other than that provided for under this law. However, if the ability of a debtor to repay any debt due to the Central Bank is doubtful, the Central Bank may accept movable assets, real estate or other property as security for payment. The Central Bank shall sell such property, possessed as a result of the debtor's failure to pay the debt, as soon as market conditions permit.(5) Accept shares or convertible public debt instruments as collateral.
Article (32) Other Functions of the Central Bank(a) The Central Bank may establish one or more clearinghouses and may assign the management thereof to a third party.(b) The Central Bank may issue regulations regarding the settlement and clearing systems of cheques and other securities.(c) The Central Bank may:(1) set up a currency museum at such a location as the Board may determine.(2) Organize or participate in conferences, seminars or other public events in and outside the Kingdom in order to develop the financial sector and the financial service industry.(3) Issue and sell memorial coins and medals.