CM-4.3 CM-4.3 Provisioning policies of branches of Foreign Banks in Bahrain
CM-4.3.1
The Agency has, for some time, been monitoring the practices adopted by
branches of foreign banks in Bahrain with regard to the making and maintaining of provisions against bad and doubtful debts in their books in Bahrain. The Agency is aware that it is the policy of some foreign banks in Bahrain to maintain provisions at their head offices, and not in their books in Bahrain. In the interests of prudence, the Agency has reviewed this matter and issues this Regulation to reflect its requirements in this area.CM-4.3.2
Specific provisions for the bad and doubtful debts (as well as any other non-performing assets) of
branch (es) of foreign banks in Bahrain are expected to be maintained in the books of Bahrainbranch (es).CM-4.3.3
If the bank is not able to meet this requirement in paragraph CM-4.3.2 above, then the bank's head office should advise the Agency, on an annual basis and in writing, of the amount of provisions set aside for the Bahrain
branch (es)'s bad debts (and any other non-performing assets).CM-4.3.4
In addition, the Agency may contact the bank's parent supervisor, on a regular or ad hoc basis, in order to obtain information about the adequacy of the provisioning for such assets.
