The banks have also been authorised to open branches in the country, said Muhammad Al-Jasser, deputy governor of Saudi Arabian Monetary Agency, the country's central bank.

Al-Jasser said there was no plan at the moment to license new Saudi banks in addition to the existing 11.

"We now have the necessary number of banks to meet the country's requirements. New banks can be opened when there is a huge new supply of capital," he told the 'Arab News'.

Apart from the SBI, the newly licensed foreign banks are BNP Paribas, J.P. Morgan, Deutsche Bank, the National Bank of Kuwait, the National Bank of Bahrain, Emirates Bank, Gulf International Bank, and National Bank of Pakistan. BNP Paribas, which opened its branch in Riyadh last month, was the first European bank to enter the Saudi market as a 100 per cent foreign bank.

Al-Jasser said Saudi Arabia was not forced to open new Saudi or foreign banks because of its accession to the WTO.

"The opening of new branches is based on the country's need, not on WTO membership," he added. He emphasised that the WTO would have no negative effect on Saudi banks.

"The Kingdom intends to develop its banking sector and offer innovative products." Saudi Arabia was officially admitted to the WTO last week, becoming its 149th member.

Foreign licensed banks can now set up branches and existing joint venture banks can increase their foreign equity to 60 percent from 40 percent in accordance with WTO regulations.