Over these decades, the economic environment has been characterized by freedom of capital flows, open investment climate, low inflation, stable financial system and availability of ample liquidity. This has encouraged the rise in both domestic and foreign investment in the country. Particularly in the past two decades, the growth has been rapid in the non-oil private sector which has almost doubled and now represents over 44% of the annual GDP, while the percentage contribution of the oil sector has declined to around 33%. As for SAMA’s other major objective of supervising and regulating the financial system, SAMA has followed prudent policies aimed at creating a sound, stable, solid and efficient financial system with a modern payments system. SAMA’s Charter and the Banking Control Law give it broad regulatory powers to ensure that banks are adequately capitalized, having efficient managements, run by fit and proper Directors and Managers who meet competence and integrity requirements, and that the banks have fit and appropriate operation and control systems. Over this long period, prudent supervisory policies and timely action have ensured that banks stayed strong and solid. This is a remarkable achievement in the face of global and regional economic uncertainties, political crisis, wars and volatilities of the oil market. Today, Saudi banks play a leading role in the financial system that also includes five large specialized government development financing institutions and leasing, investment and insurance companies and a few money changers.
But in the past year there occurred subsequent developments leading to a substantial demand for banking services that included payment of salaries, payment of public utilities bills and fees through banks, more subscription to public offering of companies' shares, increase of demand on share trading, as well as enforcement of some security controls required as measures for protecting the banking system against money laundering operations. All this occurred in a very short period, leading to rising complaints of inefficient services provided by some bank branches. Banks managed and they are still working to overcome such shortcomings by employing and training more staff, opening new branches, and providing alternative channels to perform banking services, with employment rising during twelve months by 20%. 2. Banks have made significant strides in provision of asset management services such as investment portfolio accounts, mutual investment funds aimed at domestic, regional and  2  BIS Review 59/2006  international shares and bonds markets, money market instruments and real estate investment. Assets under management increased 8 times from Rls 17 billion to Rls 132 billion during the period 1996-2005. 3. Since 1998, consumer loans have increased dramatically. This can be largely attributed to the SARIE system which permits loans to be secured by salary assignments. These loans have provided access to banking system liquidity to a large segment of customers to meet their consumer and investment needs, thereby, supporting the pace of economic activity. 4.