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  • BC-4 BC-4 Customer account services and charges

    • BC-4.1 BC-4.1 Minimum balance and charges on savings accounts

      • BC-4.1.1

        Banks may impose no more than a monthly charge of BD 1/– when the monthly weighted average balance for savings accounts for individuals falls below BD 20/– (or equivalent in other currencies).

      • BC-4.1.2

        Orphans, widows, pensioners, individuals receiving social subsidies from the Ministry of Labour & Social Affairs, students and Bahraini nationals with a monthly salary below BD 250/– should be exempted from maintaining the above minimum balance requirement for savings accounts. Banks should establish criteria for determining the eligibility of a person for exemption from the above charges and should notify their concerned customers accordingly.

    • BC-4.2 BC-4.2 Dinar Certificates of Deposits — Rules

      • BC-4.2.1

        The purpose of the contents of this section is to set out rules governing the issue of Dinar Certificates of Deposit by commercial banks.

      • BC-4.2.2

        For the purpose of this section, 'Dinar Certificates of Deposit' are financial instruments payable in Bahraini Dinars. They must be negotiable — in accordance with the Law of Commerce (No. 7) of 1987 — and must satisfy the conditions set out in this section.

      • Issue

        • BC-4.2.3

          Dinar Certificates of Deposit may be issued only by full commercial banks and must be payable at their offices in Bahrain.

        • BC-4.2.4

          Commercial banks may issue Certificates of Deposit to both resident and non-resident customers and to other banks inside and outside Bahrain.

        • BC-4.2.5

          Commercial banks may not issue Certificates of Deposit until they receive the necessary funds.

      • Denominations

        • BC-4.2.6

          Certificates of Deposit may be issued for any amount subject only to a minimum denomination of BD 30,000.

      • Maturities

        • BC-4.2.7

          Certificates of Deposit may be issued for any maturity between 183 days (6 months) and 5 years.

      • Interest rates

        • BC-4.2.8

          The interest rates on Certificates of Deposit may be freely agreed between banks and their counterparties at the time of issue.

        • BC-4.2.9

          Interest may be payable by agreement at a fixed or floating rate. In the case of a floating interest rate, the formula for revising the rate must be specified at the time of issue.

        • BC-4.2.10

          Interest may be payable at maturity or on earlier dates specified at the time of issue.

        • BC-4.2.11

          As an alternative to paying interest, Certificates of Deposit may be issued (like Treasury bills) at a discount to their face value (the repayment amount).

        • BC-4.2.12

          Interest and discounted values should be calculated on the basis of a 360 day year.

      • Negotiability

        • BC-4.2.13

          In view of their negotiability, Certificates of Deposit may be freely traded between banks, and between banks and customers. Issuing banks are permitted to re-purchase their own Certificates.

      • Safe custody

        • BC-4.2.14

          Although it is not obligatory, holders of Certificates of Deposit are advised to keep these certificates with a bank for safe custody and to handle them with care at all times.

      • Reserve ratio

        • BC-4.2.15

          Outstanding Certificates of Deposit are subject to reserve requirements in accordance with the provisions set out under section BR-4.2.

      • Other conditions

        • BC-4.2.16

          Banks must not describe deposit receipts, confirmations and other non-negotiable documents relating to ordinary deposits as 'Certificates of Deposit' and must not include such liabilities among Certificates of Deposit in their monthly statistical reports (also see Module BR).

        • BC-4.2.17

          In their statistical reports (also see Module BR), banks should always classify their outstanding Certificates of Deposit according to the type of customer (e.g. resident etc.) to whom they were first issued.

    • BC-4.3 BC-4.3 Disclosure of charges

      • BC-4.3.1

        In order to improve customer awareness and enhance transparency of bank charging structures, full commercial banks should display, by notice in their banking halls (both head offices and branches), a list of current charges.

      • BC-4.3.2

        Banks should also ensure that each customer is in receipt of its current list of charges. The list should specify standard charges and commissions that will be applied by the bank to individual services and transactions and to specific areas of business.

      • BC-4.3.3

        The requirement in this section is in addition to the requirements set out under section CM-8.2 that require all full commercial banks to display, by a conspicuous notice, their current effective rate of interest.

    • BC-4.4 BC-4.4 Accounts held for clubs and societies in Bahrain

      • BC-4.4.1

        All clubs and societies registered with the General Organisation for Youth and Sports (GOYS), are permitted under GOYS rules to only have one account with FCBs in Bahrain.

      • BC-4.4.2

        The FCB is requested to notify GOYS when any club or society registered with GOYS requests the opening of an account with the bank. The purpose of the notification is to obtain clarification whether or not the account in question can be opened in accordance with the rules of GOYS.

      • BC-4.4.3

        For accounts already held with the FCBs for clubs and societies registered with GOYS (i.e. before the application of the regulation in this section), the bank is requested to provide details of such accounts to GOYS (by reference to account name, relevant society, date opened and type of account) as soon as possible. If appropriate, GOYS will contact the relevant club or society in writing (with a copy to the bank) with instructions (e.g. to close the account) regarding such account.

    • BC-4.5 BC-4.5 Current accounts

      • BC-4.5.1

        FCBs levying fees on their low-balance customer current accounts are required by the Agency to apply such fees to average balances when these fall below a prescribed level during a specified period.

      • BC-4.5.2

        In order to prevent incidences of returned cheques due to maintenance of low-balance current accounts, the banks may convert some low-balance and/or inactive current accounts to savings accounts.

    • BC-4.6 BC-4.6 Brokerage fees

      • BC-4.6.1

        The purpose of the contents of this section is to set out the new scale of brokerage fees effective for all banks in Bahrain.

      • BC-4.6.2

        The new scale of fees is the result of discussion and consultation between The Bankers' Society and the Bahrain Money Brokers.

    • BC-4.7 BC-4.7 Notification to the Agency on introduction of new or expanded customer products and facilities

      • BC-4.7.1

        The content of this section is applicable only to full commercial banks licensed by the Agency.

      • BC-4.7.2

        All institutions referred to under paragraph BC-4.7.1 are required to notify the Agency before the introduction of any new or expanded customer products and facilities. The Agency will respond to the concerned bank within one week of receipt of the notification if it has any observations on the new product.

      • BC-4.7.3

        Further, institutions should also advise the Agency, on a six-monthly basis, on the status of new or expanded products and facilities. The advice should cover the following aspects:

        (a) response to,
        (b) success of, and
        (c) difficulties in,

        the introduction of new or expanded products and facilities. The institution should also advise the Agency on any variances which are introduced to the terms and conditions applying to these products and facilities.

    • BC-4.8 BC-4.8 Procedures for inheritance of financial assets

      • BC-4.8.1

        The content of this section is applicable to all full commercial banks licensed by the Agency in the Kingdom of Bahrain.

      • BC-4.8.2

        The Agency requires all commercial banks to follow the undermentioned procedures regarding the distribution of the financial assets of a deceased customer.

        (a) Legal ownership of financial assets should only pass after sight of, and in accordance with, the relevant documentation issued by the Ministry of Justice (known as the "statutory portion").
        (b) Distribution of assets should be made to the order of an individual named in, and in accordance with, a mandate, duly certified by the Ministry of Justice, that reflects the permission of all inheritors that the named individual may act on their collective behalf.
        (c) Where minors are inheritors, the Ministry of Justice documentation must specifically refer to their inheritance and the instruction followed absolutely.