The banking sector development in the GCC Banking sector development in Saudi Arabia 1.1 Early banking in Saudi Arabia was confined to involving a few foreign-based commercial firms, such as the branch of Algemene Bank Nederland, and numerous moneychangers. Their primary activity was to provide financial services both domestically and by pilgrimage. After the oil exploration in 1939, the more structured and centralized type of banking system developed, and as soon as World War II ended, the Saudi sector drew leading foreign banks to establish branches. The French Banque de l’Indochine and Arab Bank Limited then established their branches in Jeddah in 1948; while three major banks established their branches in 1950, which are the British Middle East Bank, the National Bank of Pakistan, and Bank Misr (of Egypt). Until 1952, a year that witnessed the establishment of the Saudi Arabia Monetary Agency (SAMA), Saudi Arabia had no national currency .SAMA introduced a paper money in the form of pilgrim receipts during 1950-6, which were covered by foreign currencies and precious metals. In 1960, the arrival of Saudi national currency,…