• Reporting Requirements

    • BR BR BMA Reporting Requirements

      • BR-A BR-A Introduction

        • BR-A.1 BR-A.1 Purpose

          • BR-A.1.1

            The purpose of this module is to set out the Agency's reporting requirements applicable to the banks as part of the Agency's ongoing supervision activities.

          • BR-A.1.2

            This module provides support for certain other parts of the Rulebook, mainly:

            (a) Principles of Business;
            (b) Public Disclosure;
            (c) Credit Risk Management;
            (d) Operational Risk Management;
            (e) Financial Crimes;
            (f) Capital Adequacy;
            (g) High Level Controls;
            (h) Business and Market Conduct; and
            (i) Audit Firms.

          • BR-A.1.3

            Unless otherwise stated, all reports referred to in this module should be addressed to Banking Supervision Directorate of the Agency.

        • BR-A.2 BR-A.2 Key requirements

          • Regular reporting — Annual requirements

            • BR-A.2.1

              All locally incorporated banks in the Kingdom of Bahrain are required to submit to the Agency their annual reports (in compliance with the provisions set out under section BR-1.1) no later than the end of 3 calendar months from the date of such reports. In addition, these banks are also required to submit supplementary information (as listed under section BR-1.1) to the Agency.

            • BR-A.2.2

              All Bahrain branches of foreign banks are required to submit to the Agency their annual audited financial statements (in compliance with the provisions set out under section BR-1.2) no later than the end of 3 calendar months from the date of such statements. In addition, these banks are also required to submit supplementary information (as listed under section BR-1.2) to the Agency.

          • Regular reporting — Semi-annual requirements

            • BR-A.2.3

              All FCB Bahrain branches of foreign banks are required to submit to the Agency their Balance Sheet and Profit and Loss Accounts (in compliance with the provisions set out under section BR-2.1) no later than the end of 8 weeks from the date of such statements.

          • Regular reporting — Quarterly requirements

            • BR-A.2.4

              All locally incorporated banks in the Kingdom of Bahrain are required to submit to the Agency the following information on a quarterly basis:

              (a) PIR Forms (in accordance with the provisions set out under section BR-3.1);
              (b) reviewed (unaudited) quarterly financial statements (in accordance with the provisions set out under section BR-3.1); and
              (c) large exposure returns (in accordance with the provisions set out under section BR-3.1).

            • BR-A.2.5

              All Bahrain branches of foreign banks are required to submit to the Agency PIRB Forms (in accordance with the provisions set out under section BR-3.2).

            • BR-A.2.6

              All banks licensed by the Agency in the Kingdom of Bahrain are required to submit to the Agency quarterly statistical returns as required under section BR-3.3).

          • Regular reporting — Monthly requirements

            • BR-A.2.7

              All banks licensed by the Agency in the Kingdom of Bahrain are required to submit to the Agency monthly statistical returns as required under section BR-4.1).

            • BR-A.2.8

              All locally incorporated banks listed on the Bahrain Stock Exchange are required to report to the Capital Markets Supervision Directorate of the Agency, on a monthly basis, information relating to their Directors' interests in the shares of locally incorporated banks listed on the Bahrain Stock Exchange (in accordance with the provisions set out under section BR-3.1).

          • Ad-hoc reporting and notification

            • BR-A.2.9

              All banks licensed by the Agency in the Kingdom of Bahrain are required to notify and report to the Agency on the following matters:

              (a) large exposures;
              (b) changes in strategy and/or corporate plan;
              (c) changes in management;
              (d) changes in dealing staff;
              (e) appointment of a Compliance Manager/Officer;
              (f) money laundering and transfers by charitable organisations;
              (g) promotion of financial products and services;
              (h) authorised signatories;
              (i) material losses through loan write-offs, fraud or other events.

            • BR-A.2.10

              All locally incorporated banks are required to give the Agency immediate written notification of any actual breach by such bank of the minimum Risk Asset Ratio(s) (RAR) in accordance with section BR-5.2.

            • BR-A.2.11

              All FCBs banks licensed by the Agency in the Kingdom of Bahrain are required to notify and report to the Agency on the introduction of new and expanded customers and products (section BR-5.3).

        • BR-A.3 BR-A.3 Regulation history

          • BR-A.3.1

            This module was first issued in July 2004 as part of the initial launch of the BMA Rulebook volume for conventional banks. All regulations in this volume have been effective since this date. All subsequent changes are dated with the month and year at the base of the relevant page and in the Table of Contents. Chapter UG-3 of Module UG provides further details on Rulebook maintenance and control. The most recent changes made to this module are detailed in the table below:

            Summary of changes

            Module Ref. Change Date Description of Changes
            BR-5.1.13 01/04/05 Notification of fraud
            BR-5.1 01/10/05 New threshold for reporting of transfers by charities and prior approval of appointment of compliance officer / manager
            BR-5.1.4 01/01/06 Addition of contact details to management information details
            BR-3.3, BR-4.1 & BR-5.1.14 01/04/06 Revised statistical returns instructions and new notification requirement for material losses
            BR-3.3 and BR-4.1 01/07/06 Submission of Form SR-6 is a monthly requirement
            BR-4.1 01/07/06 Deletion of references to precious metals and commodities returns. Transfer of reserve requirements material from BR-4.2 to BR-4.1.
            BR-4.2 01/07/06 Deletion of reserve requirements material (moved to BR-4.1).
            BR-4.1.3 01/07/06 Revised date for submission of statistical forms
            BR-5.1.9 01/07/06 Minor changes reflecting change of Compliance Unit to Directorate

          • Evolution of the Module

            • BR-A.3.2

              Prior to the development of the Rulebook, the Agency had issued various circulars representing regulations covering different aspects of BMA reporting structure. These circulars were subsequently compiled into a folder "Part 2: Reports" which was part of the information pack ("The Establishment, regulations and supervision of banks and other financial institutions in Bahrain") issued in 1997. The contents of that information pack have now been incorporated in this module.

            • BR-A.3.3

              In addition, certain circulars have been incorporated in this module that supplement the BMA reporting requirements set out in the information pack mentioned in paragraph BR-A.3.2. These circulars and their evolution into this module are listed below:

              Circular Ref. Date of Issue Module Ref. Circular Subject
              BC/7/01
              (partial)
              23 Oct 2001 BR-1.1 Audited Financial Statement of Locally Incorporated Banks for the Year Ending 31 December 2001 and Subsequent Years.
              no reference
              (partial)
              Apr 1981 BR-1.1 Precious Metals and Commodities
              BC/3/02 13 Mar 2002 BR-1.1 Additional Public Disclosure Requirements Amended Version — 2002
              ODG/329/03 10 Sep 2003 BR-1.1 Corporate Governance Reporting
              BC/8/01
              (partial)
              23 Oct 2001 BR-1.2 Audited Financial Statement of Branches of Foreign Banks for the Year Ending 31 December 2001 and Subsequent Years.
              EDBC/1/95 26 Aug 1995 BR-1.2 Re: Provisioning Policies of Branches of Foreign Banks in Bahrain
              BC/1/99
              (partial)
              22 Feb 1999 BR-2.1 Enhancing Bank Transparency
              ODG/50/98
              (partial)
              11 Sep 1998 BR-3.1, BR-5.2 Market Risk Capital Adequacy Regulations
              BC/07/02 26 Jun 2002 BR-3.1, BR-3.2 Review of PIR by External Auditors
              BC/06/00 26 Apr 2000 BR-3.1, BR-3.2 BMA — Prudential Returns
              BC/12/01
              (partial)
              26 Nov 2001 BR-3.1, BR-5.1 The Monitoring and Control of Large Exposures of Banks Licensed by the Agency
              ER/118/98 2 Feb 1998 BR-3.3, BR-4.1 Revised Statistical Returns
              ER/247/98 22 Mar 1998 BR-3.3, BR-4.1 Revised Statistical Returns
              OG/89/88 30 Jun 1988 BR-4.2 Reserve Balances
              BMA/751/93
              (partial)
              8 Jul 1993 BR-4.3 Directors' Interest in the Shares of, and the Unaudited Quarterly Financial Statements of, Locally Incorporated Banks Quoted on the Bahrain Stock Exchange.
              BC/904/95
              (partial)
              24 Jul 1995 BR-5.1 Notification to, and approval from the Agency for certain matters
              BC/309/94 28 Mar 1994 BR-5.1 Management Personnel
              BMA/1287/94
              (partial)
              6 Nov 1994 BR-5.1 Foreign Exchange, Securities and Other Dealers
              BC/13/99
              (partial)
              15 Jun 1999 BR-5.1 Compliance, Risk Management and Internal Controls
              EDBC/6/01
              (partial)
              14 Oct 2001 BR-5.1 Re: Money Laundering Regulation
              EDBC/73/96
              (partial)
              1 May 1996 BR-5.1 Explanatory note on the promotion of Banking and Financial Products offered in/from Bahrain by Means of Incentives etc.
              BMA(4)/91/832 22 Oct 1991 BR-5.1 Specimen Signatures
              OG/45/88 13 Mar 1988 BR-5.2 Write-Off — Credit Facility
              ODG/145/92 18 Aug 1992 BR-5.3 New or expanded products and facilities in the Retail Banking Field
              BC/3/00 5 Mar 2000 BR-5.3 Re: Accounts for Charity Organisations
              BC/03/99 27 Feb 1999 Appendix New Prudential Information Returns

          • Effective date

            • BR-A.3.4

              The contents in this module are effective from the date of the original circular (BR-A.3.3) or from the date of changes shown in BR-A.3.2.

      • BR-1 BR-1 Regular reporting — Annual requirements

        • BR-1.1 BR-1.1 Locally incorporated banks

          • BR-1.1.1

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

          • Annual reports

            • BR-1.1.2

              All banks, referred to under paragraph BR-1.1.1, are required to submit to the Agency their annual reports within 3 calendar months of the date of such reports.

          • Supplementary information

            • BR-1.1.3

              In addition to the reports required in paragraph BR-1.1.2, banks are also required to submit to the Agency the following information:

              (a) The external auditors' management letter;
              (b) Audited financial statements of all subsidiaries (whether or not consolidated) and all overseas branches (including their accounting policies where these policies differ from those of the parent bank), along with their management letters;
              (c) The bank's group structure and the Bahrain office's internal organisation charts;
              (d) A list of non-performing and rescheduled loans (including name of customer, country, amount outstanding, net interest income for the year attributed to profit & loss and the reasons for attributing interest to income); and
              (e) A reconciliation statement between the audited financial statements and the relevant prudential returns and monthly statistical returns.
              (f) Report on corporate governance framework attached to year-end PIR (see Appendix BR 10 for sample report)

          • Compliance

            • BR-1.1.4

              In addition to the provisions of section AU-3.7, the Audited financial statements or the annual reports of these banks should be in full compliance with:

              (a) the International Accounting Standards; and
              (b) the disclosure requirements set out under sections PD-1.3 and PD-1.4.

        • BR-1.2 BR-1.2 Branches of foreign banks

          • BR-1.2.1

            The content of this section is applicable to branches (licensed by the Agency) of foreign banks.

          • Annual audited financial statements

            • BR-1.2.2

              All branches, referred to under paragraph BR-1.2.1, are required to submit to the Agency their annual audited financial statements of their Bahrain operations within 3 calendar months of the date of such statements. Such accounts must be prepared in a format agreed between the branch and its external auditors.

          • Supplementary information

            • BR-1.2.3

              In addition to the statements required in paragraph BR-1.2.2, branches are also required to submit to the Agency the following information:

              (a) the external auditors' management letter;
              (b) a list of non-performing and rescheduled loans (including name of customer, country, amount outstanding, net interest income for the year attributed to profit & loss and the reasons for attributing interest to income);
              (c) a reconciliation statement between the audited financial statements and the relevant prudential returns and monthly statistical returns;
              (d) the head office's annual audited financial statements; and
              (e) a statement of provisions as set out in paragraph BR-1.2.4, below.

          • Provisions against branch assets in head office books

            • BR-1.2.4

              If specific provisions against the assets of a branch are maintained in the books of its head office, the Agency should be advised on an annual basis and in writing (along with the information listed under paragraph BR-1.2.3) of the amount of provisions set aside for the Bahrain branch's bad debts (and any other non-performing assets). For detailed guidance related to this subject, see section CM-4.3.

          • Compliance

            • BR-1.2.5

              The annual accounts should be in full compliance with the International Accounting Standards.

        • BR-1.3 All licensed banks

          [This Section deleted 07/2006]

      • BR-2 BR-2 Regular reporting — Semi-annual requirements

        • BR-2.1 BR-2.1 FCB branches of foreign banks

          • BR-2.1.1

            The content of this section is applicable only to FCB branches (licensed by the Agency) of foreign banks.

          • Financial information

            • BR-2.1.2

              Branches (referred to under paragraph BR-2.1.1) are required to submit to the Agency the following information (in the same format as their Annual Audited Accounts) for their Bahrain operation on a semi-annual basis (within eight weeks of the date of these statements):

              (a) Balance Sheet, and
              (b) Profit and Loss Accounts

          • Compliance

            • BR-2.1.3

              The statements mentioned under paragraph BR-2.1.2 should be in compliance with the requirements set out under section PD-2.2.

      • BR-3 BR-3 Regular reporting — Quarterly requirements

        • BR-3.1 BR-3.1 Locally incorporated banks

          • BR-3.1.1

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

          • Prudential Information Returns

            • BR-3.1.2

              PIR Forms — All banks, referred to under paragraph BR-3.1.1, must complete PIR forms (see Appendix BR 5), on a non-consolidated basis. This form is intended to be a financial report of the bank as a separate legal entity. Banks should therefore include on it all assets and liabilities of their head office and their branches in Bahrain and abroad. Separate figures in respect of the head office or "Bahrain operations" are not required.

            • BR-3.1.3

              PIRC Forms — Further, on a consolidated basis, PIRC forms (see Appendix BR 6) must also be completed in all cases where a Bahrain-incorporated bank owns subsidiary companies. Please refer to International Accounting Standards Nos. 22, 24 & 27 for definitions, accounting and consolidation requirements applicable to subsidiaries.

            • BR-3.1.4

              The forms referred to under paragraphs BR-3.1.2 and BR-3.1.3 should be submitted to the Agency on a quarterly basis within 20 calendar days of the end of the reporting date.

            • BR-3.1.5

              For guidance on completion of PIR and PIRC, refer to guidelines under Appendix BR 4.

            • BR-3.1.6

              The Agency requires all banks to request their external auditors to conduct a review of the prudential returns on a quarterly basis. The results of such review (in the form of a return review report) should be submitted to the Agency no later than 60 calendar days from the end of the subject quarter. A bank may apply for exemption from this requirement provided that it meets the criteria set out under paragraph BR-3.1.7 below.

            • BR-3.1.7

              Banks which demonstrate to the satisfaction of the Agency that they have fulfilled all of the Agency's requirements with regard to Prudential Returns for at least two consecutive quarters may apply (in writing) to the Agency for an exemption from the review procedure set out in paragraph BR-3.1.6 above.

          • Financial information

            • BR-3.1.8

              All banks, referred to under paragraph BR-3.1.1, are required to submit to the Agency reviewed (unaudited) quarterly financial statements (in the same format as their Annual Audited Accounts) on a quarterly basis (within eight weeks of the date of these statements).

          • Compliance

            • BR-3.1.9

              The statements mentioned under paragraph BR-3.1.8 should be in compliance with the requirements set out under section PD-3.2.

          • Large exposure returns

            • BR-3.1.10

              All banks, referred to under paragraph BR-3.1.1, are required to report to the Agency all large exposures (in accordance with the rules and guidance set out under chapter CM-5) on a quarterly basis using the return provided in the Appendix BR 3.

          • Overseas branches

            • BR-3.1.11

              All banks, referred to under paragraph BR-3.1.1, are required to send a brief prudential report (see Appendix BR 11) for any individual overseas branch within one month of the end of the relevant quarter.

        • BR-3.2 BR-3.2 Branches of foreign banks

          • BR-3.2.1

            The content of this section is applicable to branches (licensed by the Agency) of foreign banks.

          • Prudential Information Returns

            • BR-3.2.2

              All branches, referred to under paragraph BR-3.2.1, are required by the Agency to complete PIRB forms (see Appendix BR 7) in accordance with guidelines set out under Appendix BR 4.

            • BR-3.2.3

              These should be submitted to the Agency no later than 20 calendar days from the end of the said quarter.

            • BR-3.2.4

              The Agency requires all banks to request their external auditors to conduct a review of the prudential returns on a quarterly basis. The results of such review (in the form of a return review report) should be submitted to the Agency no later than 60 calendar days from the end of the subject quarter. A bank may apply for exemption from this requirement provided that it meets the criteria set out under paragraph BR-3.2.5 below.

            • BR-3.2.5

              Banks which demonstrate to the satisfaction of the Agency that they have fulfilled all of the Agency's requirements with regard to Prudential Returns for at least two consecutive quarters may apply (in writing) to the Agency for an exemption from the review procedure set out in section AU-3.2.

        • BR-3.3 BR-3.3 All licensed banks

          • BR-3.3.1

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

          • Statistical returns

            • BR-3.3.2

              All banks, referred to under paragraph BR-3.3.1, are required to submit the following quarterly statistical returns to the Financial Stability Directorate of the Agency:

              (a) Form SR-3 — 'Quarterly Balance Sheet by Country and Class of Customer';
              (b) Form SR-4 — 'Quarterly Balance Sheet by Currency';
              (c) Form SR-5 — 'Quarterly Classification of Loans and Advances to Domestic Non-banks'.

              (For instructions relating to the completion of the above mentioned returns, refer to Appendix BR 1 and for returns forms refer to Appendix BR 2)

            • BR-3.3.3

              The returns included in Appendix BR 2 should be submitted to the Agency in electronic form (Excel spreadsheet) via email (to erdsr@bma.gov.bh) no later than the 10th of the month following the end of the relevant quarter. One printed copy should also be delivered to the Financial Stability Directorate by the same date.

      • BR-4 BR-4 Regular reporting — Monthly requirements

        • BR-4.1 BR-4.1 All licensed banks

          • BR-4.1.1

            The content of this section is applicable to all banks (or as stated otherwise) licensed by the Agency in the Kingdom of Bahrain.

          • Statistical returns

            • BR-4.1.2

              All banks, referred to under paragraph BR-4.1.1, are required to submit to the Agency (Financial Stability Directorate) the following monthly statistical returns:

              (a) Form SR-1 — 'Monthly Balance Sheet';
              (b) Form SR-2 — 'Monthly Classification of Deposits and Other Liabilities to Banks and Non-banks'; and
              (c) Form SR-6 — Monthly Survey of BD Interest Rates on Deposits and Loans (applicable to FCBs only).

              (For instructions relating to the completion of the above mentioned returns, refer to Appendix BR 1 and for returns forms refer to Appendix BR 2)

            • BR-4.1.3

              The returns included in Appendix BR 2 should be submitted to the Agency in electronic form (Excel spreadsheet) via email to erdsr@bma.gov.bh no later than the 10th of the month following the end of the relevant month. One printed copy should also be delivered to the Financial Stability Directorate by the same date.

          • Precious metals and commodities returns

            • BR-4.1.4

              [This Paragraph deleted with effect from 1 July 2006].

          • Reserve requirements

            • BR-4.1.4a

              The Banking Services Directorate will calculate the reserve requirement of each conventional bank licensee bank on a monthly basis using the figures reported in the monthly statistical report, Form SR-2 (see Rule BR-4.1.2 above) and will notify each bank of its required reserve (if any).

            • BR-4.1.4b

              The monthly reserve requirements will be calculated as 5% of the total of a conventional bank licensee's BD deposits from non-banks and the BD Certificates of Deposit that it has issued to customers.

            • BR-4.1.4c

              Reserve requirements, because of their scope of coverage (cf. Rule BR-4.1.4b), generally only apply to conventional retail bank licensees. They may apply, however, to conventional wholesale bank licensees, if they undertake on-shore business (cf. Section LR-1.2).

        • BR-4.2 Full commercial banks

          [This section deleted 07/2006]

        • BR-4.3 BR-4.3 Locally incorporated banks

          • BR-4.3.1

            The content of this section is only applicable to locally incorporated banks.

          • Directors' interests in the shares of locally incorporated banks listed on the Bahrain Stock Exchange

            • BR-4.3.2

              All locally incorporated banks listed on the Bahrain Stock Exchange are required to report to the Capital Markets Supervision Directorate of the Agency the following information, on a monthly basis, relating to their Directors:

              (a) the number and type of interests of each Director in the shares (i.e. whether by shareholding, options etc.) of all such banks in which the respective Directors have interests in and the rights associated with such interests;
              (b) the date on which, and manner in which, such interests were acquired or disposed of (as the case may be);
              (c) the acquisition price paid, or disposal price received, for such interests; and
              (d) the person(s) from, or to, whom the interests in such shares were acquired or disposed (as the case may be).

            • BR-4.3.3

              The information required in paragraph BR-4.3.2 above should be submitted to the Agency no later than 15 days following the end of the relevant month.

      • BR-5 BR-5 Ad-hoc reporting and notification

        • BR-5.1 BR-5.1 All licensed banks

          • BR-5.1.1

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

          • Large exposures

            • BR-5.1.2

              Should any bank find that, for reasons outside its control or otherwise, it has an exposure to an individual counterparty (other than an exempt exposure) which results in it exceeding any of the limits set out under Chapter CM-5, this should be reported immediately to the Agency for its consideration, and action should be taken immediately to bring the exposure back within applicable limits as soon as possible.

          • Changes in strategy and establishment of subsidiaries/SPVs

            • BR-5.1.3

              All banks should notify the Agency, in writing, of all major changes (regardless of type and/or effect, including the establishment of branches, subsidiaries, SPVs and cross-border presences — see HC-1.5 for full text) to strategy or corporate plan prior to implementation.

          • Current management and changes thereto

            • BR-5.1.4

              All banks should, on a continuous basis, keep the Agency informed, in writing, of the senior management positions held by relevant persons (including General Managers, Deputy General Managers and other senior persons). Such notification should include the following information:

              (a) Full Name (and CPR for Bahrain resident management);
              (b) Contact details including address and emergency phone no;
              (c) Date of birth;
              (d) Place of birth (including town etc.);
              (e) Nationality;
              (f) Professional qualifications (by educational establishment and dates); and
              (g) Career details over the last ten years (with your institution or elsewhere).

            • BR-5.1.5

              The Agency should also be notified of any changes to the positions mentioned under paragraph BR-5.1.4 that may occur from time to time subject to observing the requirements set out in sections HC-1.5 and HC-2.1.

            • BR-5.1.6

              For detailed rules and guidance on prior notification of appointment and changes in management inventory, refer to chapter HC-1 and HC-2.

          • Changes in dealing staff

            • BR-5.1.7

              All banks should notify the Agency of the following events, within 21 days of their occurrence:

              (a) the appointment of a dealer, including promotion to Head of a Dealing function. The information provided should include details as set out under section HC-4.1.
              (b) the resignation, suspension, dismissal or departure from your institution for whatever reason of a dealer (including his/her transfer to other duties within your institution). The information provided should include details as set out under section HC-4.1.

          • Appointment of a Compliance Manager/Officer

            • BR-5.1.8

              The appointment of a compliance manager/officer requires the Agency's prior approval (refer to section HC-3.2 for full details). The bank should also outline how the compliance function fits into the bank's senior management reporting structure, and should give details of relevant reporting lines within the bank.

          • Money laundering and suspicious transactions

            • BR-5.1.9

              The Money Laundering Reporting Officer (or his/her duly authorised delegate) must send a report to the Compliance Directorate of the BMA where he/she knows or has suspicions that a transaction might involve money laundering or terrorist financing, either due to the customer's economic standing or because it meets one of the examples of suspicious transactions described in Appendix FC 3.

          • Promotion of financial products and services offered in/from Bahrain by mean of incentives etc.

            • BR-5.1.10

              The Agency should be sent copies of documentation relating to promotional schemes at least ten days prior to their launch for information purposes. Refer to chapter BC-1 for more details.

          • Authorised signatories

            • BR-5.1.11

              In order to maintain an up-to-date record of authorised signatories of respective banks, the Agency requires all banks to submit to it a list of specimen signatures (and changes to it from time to time) of the officials authorised to sign on behalf of the concerned bank.

          • UN SCR 1373 (2001)

            • BR-5.1.12

              The Agency requires all banks to notify it immediately of any act that might contravene the provisions of UN Security Council Resolution 1373 (2001). Banks should refer to chapter FC-8 for full details of this requirement.

          • Notification of fraud or other material concerns

            • BR-5.1.13

              All banks must report immediately to the Agency any frauds, either attempted or realised, or any well-founded concerns about the integrity of individual Directors or members of management. This obligation to disclose extends to individual Board members and members of management: i.e. if a Director or member of management has reasonable grounds to believe that information that should have been reported to the Agency has not, then they have a duty to report the matter personally to the Agency. All such cases shall be treated in the strictest confidence by the Agency.

            • BR-5.1.14

              All banks must report immediately to the Agency any material losses as soon as the bank becomes aware of them. This notification requirement is separate from notifications for loan write-offs (see BR-5.2.3) or frauds (see above), but refers to losses caused by external events (e.g. falls in stock markets) or internal control failures. In this context "material" would mean: a loss which exceeds 5% of net earnings in a given quarter; or a loss which reduces the bank's capital adequacy by more than 1%; or a loss which reduces total assets by more than 1%.

          • Accounts for charity organisations

            • BR-5.1.15

              All banks, referred to under paragraph BR-5.1.1, should notify the Agency of any transfer of funds amounting to BD 3,000 or above (or equivalent in other currencies) from accounts held by the bank for charitable organisations registered in the Kingdom of Bahrain (also see section FC-1.6). Such notification should include details of amount transferred, account name and number, and beneficiary (name and location).

        • BR-5.2 BR-5.2 Locally incorporated banks

          • BR-5.2.1

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

          • Capital adequacy

            • BR-5.2.2

              All banks, referred to under paragraph BR-5.2.1, must give the Agency immediate written notification of any actual breach by such banks of the minimum Risk Asset Ratio(s) (RAR) in accordance with section CA-2.5. Where such notification is given, the bank must also adhere to the additional notification and reporting requirements as set out under section CA-2.5.

          • Write-off of credit facility

            • BR-5.2.3

              All banks, referred to under paragraph BR-5.2.1, should notify the Agency of any write-off of a credit facility, (i.e., loan, overdraft and any other credit facility) of an amount in excess of BD 100,000 (Bahraini Dinars One Hundred Thousand), or its equivalent in foreign currency. See section CM-7.1 for further details.

        • BR-5.3 BR-5.3 Full commercial banks

          • BR-5.3.1

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

          • Introduction of new or expanded customer products and facilities

            • BR-5.3.2

              All banks, referred to under paragraph BR-5.3.1, should notify the Agency of information relating to any new or expanded customer products and facilities in accordance with the requirements set out under section BC-4.7.

    • PD PD Public Disclosure Requirements

      • PD-A PD-A Introduction

        • PD-A.1 PD-A.1 Purpose

          • PD-A.1.1

            The purpose of this module is to set out the rules and guidelines that the banks should adhere to in order to enhance corporate and financial transparency through better public disclosure.

          • PD-A.1.2

            This module provides support for certain other parts of the Rulebook, mainly:

            (a) Principles of Business;
            (b) High Level Controls;
            (c) Audit Firms;
            (d) BMA Reporting Requirements;
            (e) Capital Adequacy;
            (f) Business and Market Conduct; and
            (g) Risk Management (i.e. market, credit, liquidity and operational).

          • PD-A.1.3

            This module also provides support for certain aspects relating to disclosure requirements stipulated in the BMA Law (Amiri Decree Law No. 23 of 1973) and the Bahrain Commercial Companies Law of 2001 (as amended).

        • PD-A.2 PD-A.2 Key requirements

          • General guidance and best practice

            • PD-A.2.1

              Section PD-B.1 lists the key guidance papers on disclosure as issued by the Basel Committee on Banking Supervision and International Organization of Securities Commissions. These papers serve as international best practice in financial and other disclosures.

          • Annual audited financial statements (annual reports)

            • PD-A.2.2

              Locally incorporated banks are required to publish their audited financial statements per the rules set out in the BMA law, Bahrain Commercial Companies Law of 2001 (as amended) and the Bahrain Stock Exchange regulations. The audited financial statements should be prepared in accordance with IAS.

            • PD-A.2.3

              Locally incorporated banks must, in their Annual Reports, provide timely information which facilitates market participants' assessment of them. There are seven broad categories of information (as set out in section PD-1.3 and section PD-1.4), each of which should be addressed in clear terms and with appropriate details to help achieve a satisfactory level of bank transparency.

          • Annual disclosure in the annual audited financial statements of banks listed on the Bahrain Stock Exchange (BSE)

            • PD-A.2.4

              The Directors' Report attached to the annual financial statements of banks (referred to under section PD-1.4) should contain details of the interests of Directors, chief executive officers and managers (persons as defined under section HC-2.1, respectively) in the shares of such banks. Such details should include:

              (a) total interests in the shares of such banks by individual persons mentioned above, and
              (b) changes in such interests from the previous financial year to the current financial year.

          • Semi-annual disclosure by commercial branches of foreign banks

            • PD-A.2.5

              Branches (referred to under section PD-2.2) are required by the Agency to prepare and disclose to the public the following information (in the same format as their Annual Audited Accounts) for their Bahrain operations on a semi-annual basis:

              (a) Balance Sheet, and
              (b) Profit and Loss Accounts

          • Publication of reviewed (unaudited) quarterly financial statements

            • PD-A.2.6

              Locally incorporated banks should prepare reviewed (unaudited) quarterly financial statements on a quarterly basis in accordance with International Accounting Standard 34 (Interim Financial Reporting). Such statements should be in the same form, and should be prepared on the same basis, as is required by Bahrain law for banks' annual published financial statements.

          • Disclosure of interest rates

            • PD-A.2.7

              The Agency requires all FCBs to display, by a conspicuous notice, their current effective rate of interest and charges.

          • Disclosure relating to Deposit Protection Schemes (the 'Scheme')

            • PD-A.2.8

              The Agency requires all FCBs to give prominence to the protection of deposits afforded under the Deposit Protection Scheme (see chapter CP-2) — for example in related marketing materials and in general notices featured within banking halls and in account documentation, including audited financial statements.

          • Public disclosure via the internet

            • PD-A.2.9

              Non-listed locally incorporated OBUs and IBs may apply to the Agency to disclose their quarterly financial statements via the Internet. If a non-listed locally incorporated OBU or IB wishes to cease disclosure of quarterly financial statements via the local press and use the internet instead, it must satisfy the criteria in paragraph PD-5.1.2.

        • PD-A.3 PD-A.3 Regulation history

          • PD-A.3.1

            This module was first issued in July 2004 as part of the conventional principles volume. All subsequent changes are dated with the month and year at the base of the relevant page and in the Table of Contents. Chapter UG-3 of Module UG provides further details on Rulebook maintenance and control. The most recent changes made to this module are detailed in the table below:

            Summary of changes

            Module Ref. Change Date Description of Changes
            PD-5 Jan 2005 New Internet Disclosure rules
            PD-4.1 Jul 2005 Small definition change to consumer loans
            PD-2.1, PD-3.1 Jan 2006 Revised notification requirements for disclosures
            PD-3.1, April 2006 Specific requirements to disclose changes in shareholders' equity

          • Evolution of the Module

            • PD-A.3.2

              Prior to the development of this Rulebook, the Agency had issued various circulars representing regulations covering different aspects of public disclosure requirements. These circulars have now been consolidated into this module covering regulations relating to public disclosure requirements. These circulars and their evolution into this module are listed below:

              Circular Ref. Date of Issue Module Ref. Circular Subject
              EDBC/14/96 17 Jan 1996 PD-B.2 Public Disclosure of the Trading and Derivatives Activities of Banks and Securities Firms
              BC/2/99 21 Feb 1999 PD-1.3, PD-3.2 Public Disclosure
              BC/3/02 13 Mar 2002 PD-1.3 Additional Public Disclosure Requirements Amended Version — 2002
              no reference
              (partial)
              Apr 1981 PD-1.5 Precious Metals and Commodities
              BMA/751/93 8 Jul 1993 PD-1.1, PD-1.3, PD-1.4, PD-3.2 Directors' Interest in the Shares of, and the Unaudited Quarterly Financial Statements of, Locally Incorporated Banks Quoted on the Bahrain Stock Exchange.
              EDBC/782/93 17 Jul 1993 PD-1.1 The Interests of Directors, Chief Executive and Senior Managers in the Shares of Locally Incorporated Banks Quoted on the Bahrain Stock Exchange.
              BC/1/99 22 Feb 1999 PD-2.2 Enhancing Bank Transparency
              OG/73/02 17 Feb 2002 PD-4.2 Duty to Display Current Effective Rate of Interest
              OG/50/92 4 Mar 1992 PD-4.2 Consumer Finance
              OG/107/01 3 Mar 2001 PD-4.3 Disclosure of BD Interest Rates
              OG/425/94 21 Dec 1994 PD-4.4 Deposit Protection
              OG/423/93 28 Nov 1993 PD-4.4 Deposit Protection Scheme (the "Scheme")

          • Effective date

            • PD-A.3.3

              The contents in this module are effective from the date depicted in the original circulars (see Paragraph PD-A.3.2) from which the requirements are compiled.

      • PD-B PD-B General guidance and best practice

        • PD-B.1 PD-B.1 Guidance provided by other international bodies

          • Basel Committee on Banking Supervision: Various papers

            • PD-B.1.1

              The papers below are to be taken as guidance by licensees in order to improve public disclosure practices.

            • PD-B.1.2

              The Basel Committee on Banking Supervision has issued various papers in relation to the subject matter of this module. These papers are listed as below:

              •  'Enhancing Bank Transparency' — September 1998 (see www.bis.org/publ/bcbs41.pdf)
              •  'Sound Practices for Loan Accounting and Disclosure' — July 1999 (see www.bis.org/publ/bcbs55.pdf)
              •  'Best Practices for Credit Risk Disclosure' — September 2000 (see www.bis.org/publ/bcbs74.pdf)

            • PD-B.1.3

              In addition, the Basel Committee, in conjunction with the International Organization of Securities Commissions (IOSCO) has issued the following papers that relate to the subject matter of this module:

              •  'Public Disclosure of the Trading and Derivatives Activities of Banks and Securities Firms' — November 1995 (see www.iosco.org document no. IOSCOPD48)
              •  'Recommendations for Public Disclosure of Trading and Derivatives Activities of Banks and Securities Firms' — October 1999 (see www.bis.org/publ/bcbs48.pdf)
              •  'Intra-group Transactions and Exposure Principles' — December 1999 (see www.bis.org/publ/bcbs62.pdf)
              •  'Risk Concentrations Principles' — December 1999 (see www.bis.org/publ/bcbs43.pdf)

      • PD-1 PD-1 Annual disclosure requirements

        • PD-1.1 PD-1.1 Introduction

          • PD-1.1.1

            The purpose of this chapter is to set out the Agency's requirements relating to the disclosure of information in the bank's annual audited financial statements ('Annual Report'). This chapter also refers to the Bahrain Commercial Companies Law of 2001 (as amended) and the Bahrain Stock Exchange regulations relating to public disclosure and reporting requirements.

          • PD-1.1.2

            For the purpose of this module, the following definitions apply:

            (a) 'Director' includes any person who occupies the position of a Director and any person who appears to the Agency to be a Director (howsoever called) of the applicant/licensed locally incorporated bank and its subsidiaries;
            (b) 'Chief Executive/General Manager' means a person who is responsible under the immediate authority of the Directors for the conduct of the applicant/licensed locally incorporated bank, including its subsidiaries and overseas branches, and Bahrain branches of foreign banks;
            (c) 'Manager' means a person who, under the immediate authority of a Director or the chief executive/general manager, exercises major managerial functions or is responsible for maintaining accounts or other records of the applicant/licensed bank; and
            (d) 'Interest in the shares' shall include, but not be limited to, direct and/or indirect ownership of such shares, the right of voting associated with such shares, the right to receive dividends payable on such shares, and/or any right, regardless of the form thereof, to purchase (or otherwise acquire an interest in) such shares at any time.

        • PD-1.2 PD-1.2 Publication of annual audited financial statements (Annual Reports)

          • PD-1.2.1

            Locally incorporated banks are required to publish their audited financial statements per the rules set out in the BMA law, Bahrain Commercial Companies Law of 2001 (as amended) and the Bahrain Stock Exchange regulations (this latter obligation only applies to banks listed on the Bahrain Stock Exchange). The audited financial statements should be prepared in accordance with IAS.

        • PD-1.3 PD-1.3 Disclosure in the annual audited financial statements (Annual Reports)

          • Introduction

            • PD-1.3.1

              Banks (referred to under section PD-1.2) should, in their Annual Reports, provide timely information which facilitates market participants' assessment of them. There are seven broad categories of information (as set out in paragraphs PD-1.3.5 to PD-1.3.11 and section PD-1.4), each of which should be addressed in clear terms and with appropriate details to help achieve a satisfactory level of bank transparency.

            • PD-1.3.2

              The disclosure requirements listed in paragraphs PD-1.3.5 to PD-1.3.11 and section PD-1.4 below are in addition to or serve to clarify the disclosure requirements of IASs. These requirements may be:

              (a) integrated into the Notes to the Accounts; or
              (b) addressed in the Directors' Report.

            • PD-1.3.3

              The Agency requires that all banks referred to under section PD-1.2 should maintain an up-to-date checklist of all applicable International Accounting Standards (IASs) (including disclosure requirements) and the requirements set out in this section for full compliance purposes.

            • PD-1.3.4

              If a bank is not able to achieve full compliance with the requirements stated in this chapter, a meeting should be held with the Director of Banking Supervision Directorate at the Agency in the presence of the concerned external auditors to discuss the reasons for such non-compliance prior to the finalization of the Annual Report.

          • Financial performance and position

            • PD-1.3.5

              The following information relating to the financial performance and position of the bank should be included:

              (a) discussion of the main factors that influenced the bank's financial performance for the year, explaining any differences in performance between the current year and previous years and the reasons for such changes, and discussing factors that will have a significant influence on the bank's future financial performance;
              (b) basic quantitative indicators of financial performance such as ROAE, ROAA, NIM, cost-to-income ratios etc. for the past 5 years;
              (c) a discussion of the impact of acquisitions of new businesses;
              (d) quantitative information about own funds and its components (tier-1, tier-2. tier-3 capital), risk weighted assets, risk asset ratio and debt to equity ratio both on an average basis over the period and at year end; and
              (e) the impact of changes in the capital structure on earnings and dividends.

          • Corporate governance and transparency

            • PD-1.3.6

              The following information relating to corporate governance should be included in the bank's Annual Report:

              (a) information about the Board structure (e.g., the size of the Board, Board committees, and membership), and the basic organisational structure (lines of business structure and legal entity structure);
              (b) information about the profession, business title, and experience in years of each Board member and the qualifications and experience in years of senior executives, including Chairmen, Chief Executives and General Managers (see section PD-1.1 for definitions);
              (c) descriptive information on:
              (i) the managerial structure, including:
              1. committees (see section HC-1.3 for detailed disclosure requirements relating to various types of committees),
              2. segregation of duties,
              3. reporting lines, and
              4. responsibilities;
              (ii) incentive structure (remuneration policies, executive compensation, stock options, etc.);
              (iii) the structure and organisation of the credit risk management function, including the loan review function; and
              (iv) other related internal controls including internal audit;
              (d) nature and extent of transactions with affiliates and related parties;
              (e) approved Board's communications strategy (including the use of the bank's website) which should undertake to perform at least the following:
              (i) the disclosure of all relevant information to stakeholders on a timely basis in a timely manner; and
              (ii) the provision of at least the last three years of financial data on the bank's website.
              Banks are encouraged to maintain a website. If a bank does not have a website, it must state in its strategy how it will make all relevant information available to shareholders and stakeholders on a timely basis; and
              (f) information about any changes in the structures (as mentioned in paragraphs PD 1.3.6(a) to PD 1.3.6(c) above) from prior periods.

          • Risk management strategies and practices

            • PD-1.3.7

              The following information relating to the bank's risk management strategies and practices should be included in the Annual Report:

              (a) discussion of the overall risk management philosophy, overall policy and methodologies, the nature of risks in activities and how risks arise in those activities, how (in high level terms) these risks are managed and controlled; and
              (b) discussion of risk measurement and monitoring processes, the use of risk-mitigating tools (collateral, guarantees, credit insurance, netting agreements, managing concentrations, credit derivatives), limits (e.g., credit limits, market risk limits), and periodic review of exposures.

          • Credit risk exposures

            • PD-1.3.8

              The following information relating to credit risk should be included in the bank's Annual Report:

              (a) details on how the bank manages credit risk and information on whether or not strategies used have been effective;
              (b) descriptive information about the business lines that create credit risk, the bank's strategies regarding those business lines, and the nature and composition of the exposures that arise;
              (c) the magnitude of the bank's current credit exposure on an aggregate basis, as well as its significant components;
              (d) quantitative and qualitative information on the use of credit scoring and portfolio credit risk measurement models. More specifically, descriptive information about the types of models, portfolio(s) covered and size of portfolio(s), and quantitative and qualitative information about the credit risk measurement models used, including model parameters (e.g., holding period, observation period, confidence interval etc.), their performance over time, model validation, back testing and stress testing information;
              (e) summary information about internal rating processes and explanation of the loss concept used and how internal ratings are used in the bank's internal capital allocation process, and based on these internal credit rating processes, summary information on the quality of on- and off-balance sheet credit exposures, including a discussion of counterparty and internal credit rating (information about credit exposures based on external rating is encouraged, however, proprietary information is not expected);
              (f) high-level descriptive information on the techniques and methods used for managing past due and impaired assets, including the procedures for credit quality classifications and practices and procedures to determine provisions and to evaluate the adequacy of credit loss provisions (both general and specific);
              (g) quantitative information about gross positions by major business segments (e.g., lending, investments, trading, leasing and off-balance sheet exposures). Such information should include current and future potential exposures, (e.g. for guarantees given and derivatives etc) where appropriate. In addition, maturity breakdowns should be provided (these should be consistent with the maturity bands as required under IAS but should also be extended to include 5–10 years, 10–20 years and 20 years and over), as well as average balances for the current period (as distinct from end of period balances) where materially different;
              (h) quantitative information about the composition of on- and off-balance sheet credit exposures to:
              (i) major types of counterparty, including domestic and foreign governments, domestic and foreign corporates, consumers, and other financial institutions (such information should be provided without taking account of the effects of credit risk mitigation techniques),
              (ii) intragroup transactions and exposures to related parties, Directors and shareholders (separately identified) and whether such transactions have been made on an arms length basis, and
              (iii) highly leveraged institutions and other high-risk counterparties (separately disclosed);
              (i) quantitative information concerning concentrations of credit risk, and the magnitude of concentrations of credit exposures in different types of counterparty;
              (j) comprehensive quantitative information about the non-performing loans or other impaired and past due loans:
              (i) ageing schedule (over 3 months, over 1 year, and over 3 years) of past due loans and other assets
              (ii) breakdown by relevant asset category, counterparty type and geographic area, and
              (iii) where applicable, specific, general and other provisions on the major asset categories;
              (k) aggregate quantitative information about credit facilities that have been restructured, during the period, including:
              (i) the balance of any restructured loans,
              (ii) the magnitude of any restructuring activity,
              (iii) the impact of restructured credit facilities on provisions and present and future earnings, and
              (iv) the basic nature of concessions on all credit relationships that are restructured, including loans, derivatives and other on- and off-balance sheet activities,
              If full repayment is expected, the restructured credit need not be disclosed in this section after satisfactory performance for a period of six months in accordance with the modified terms;
              (l) an individual breakdown of movement of general and specific provisions and interest in suspense, and the key methodologies assumptions behind how these provisions are determined (including historical experience, current market conditions and trends);
              (m) quantitative and qualitative information about the use of credit derivatives and other instruments (e.g. netting agreements and guarantees received) that mitigate and reallocate credit risk. Information should include:
              (i) discussion of how instruments are used, including strategy and objectives,
              (ii) notional amounts and fair value of instruments,
              (iii) amount of credit risk bought and/or sold,
              (iv) breakdown by type of instrument (e.g., total return swap, credit default swap, or other credit derivatives), and
              (v) where instruments are recorded (i.e., trading vs. banking book);
              (n) quantitative information on securitised assets under the management of the bank, the amount and type of assets securitised, and the amount of risks or assets retained, details of subordinated or first loss assets retained, and any other recourse provisions; and
              (o) quantitative information concerning obligations with respect to recourse transactions (i.e. where the asset has been sold, but the bank retains responsibility for repayment if the original counterparty defaults or fails to fulfil obligations). Information should include the amount of the assets sold and any expected losses.

          • Market risk exposures

            • PD-1.3.9

              The following information relating to market risk should be included in the bank's Annual Report:

              (a) detailed quantitative information about the nature and extent of interest rate-sensitive assets and liabilities and off-balance sheet exposures (e.g., breakdown of fixed and floating rate items and the net interest margin earned, and the duration and effective interest rates of assets and liabilities). These disclosures should also identify classes of assets and liabilities, and related gains and losses, in addition to the effect on the value of assets, liabilities and economic equity for a given specific change in interest rates;
              (b) summarised quantitative information for significant concentrations of foreign exchange exposure by currency, broken down by hedged and unhedged exposures;
              (c) summarised quantitative information about price related market risk exposure (Value-at-Risk) (i.e., to equity, commodity and other markets), including:
              (i) the magnitude of the exposure on a weekly or monthly basis,
              (ii) the maximum and minimum values in the reporting period,
              (iii) the end-of-period values, and
              (iv) the assumptions (and or models) used in calculations (e.g., confidence level, holding period, etc.);
              (d) a histogram (or similar presentation) of the overall daily profits or exposures for aggregate market risk over the reporting period. As an absolute minimum, summarised aggregate quantitative information relating to monthly VaR results giving an overview of the extent of market risk related activities should be presented; and
              (e) information showing the performance of any VaR models for the period, in particular giving the number of times actual losses exceeded the VaR estimates of the model(s).

          • Other risk exposures

            • PD-1.3.10

              The following information relating to other risks should be included in the bank's Annual Report:

              (a) quantitative information about investments in foreign subsidiaries (as included in the Financial Statements section and representing foreign currency translation risk) supplemented by a discussion about:
              (i) the nature of the related currency exposure,
              (ii) how that exposure has changed from year to year,
              (iii) foreign exchange translation effects thereon,
              (iv) the earnings impact of foreign exchange transactions, and
              (v) the effectiveness of risk management (hedging) strategies;
              (b) qualitative information about the main types of operational risks including any specific problem that is considered to be individually significant, and how the bank manages and controls such risk;
              (c) quantitative information on any material legal contingencies, including pending legal actions, and a discussion and estimate of the potential liabilities, in addition to qualitative information about how the bank manages and controls such risks.

          • Compliance

            • PD-1.3.11

              The Annual Report should include a declaration by the external auditors that no violations have taken place of:

              (a) the Bahrain Commercial Companies Law of 2001 (as amended);
              (b) the BMA Law that might have had a material effect on the business of the bank or on its financial position; and
              (c) the licensing and authorisation requirements and other rules and regulations issued by the Agency.

              In so far as the violations have any material impact on the financial statements of the bank.

        • PD-1.4 PD-1.4 Additional disclosure in the annual audited financial statements of banks listed on the Bahrain Stock Exchange (BSE)

          • PD-1.4.1

            The content of this section is applicable only to locally incorporated banks listed on the Bahrain Stock Exchange (BSE).

          • PD-1.4.2

            The disclosure requirements set out in this section for banks referred to under paragraph PD-1.4.1 are in addition to those set out in Section PD-1.3.

          • Interests of Directors, chief executive officers and managers

            • PD-1.4.3

              Without prejudice to any other requirement of Bahrain law (or any other direction of the Agency), the Directors' Report section of the annual audited financial statements of banks should contain details of the interests of Directors, chief executive officers and managers (persons as defined under section PD-1.1, respectively) in the shares of such banks. Such details should include:

              (a) total interests in the shares of such banks by individual persons mentioned above, and
              (b) changes in such interests from the previous financial year to the current financial year.

            • PD-1.4.4

              For the purpose of the disclosure required under paragraph PD-1.4.3, any interests in the shares of a bank held by the spouse(s) or children of a Director, or any other person the control of whose interests in such shares lies ultimately with the Director, shall be deemed to be the interests of the relevant Director. For a definition of 'interest in the shares', see paragraph PD-1.1.2(d).

        • PD-1.5 PD-1.5 Disclosure relating to precious metals and commodities trading activities

          • PD-1.5.1

            The content of this section is applicable to all licensed banks authorised to carry out activities related to trading in precious metals and commodities in accordance with the requirements set out under chapter LR-5.

          • Dealing authorisation

            • PD-1.5.2

              All licensed banks authorized to carry out such dealing activities are required to show in their audited annual financial statements, as a note to or on the face of the balance sheet and profit and loss account, in addition to the disclosure requirements stated in this chapter, accounts detailing assets and liabilities related to precious metals and commodities and their profit and loss account income attributable to such dealing.

      • PD-2 PD-2 Semi-annual disclosure requirements

        • PD-2.1 PD-2.1 Disclosure by commercial branches of foreign banks

          • PD-2.1.1

            The content of this section is applicable only to FCB branches (licensed by the Agency) of foreign banks.

          • PD-2.1.2

            Banks (referred to under paragraph PD-2.1.1) are required by the Agency to prepare and disclose to the public the following information (in the same format as their Annual Audited Accounts) for their Bahrain operations on a semi-annual basis:

            (a) Balance Sheet, and
            (b) Profit and Loss Accounts.

          • PD-2.1.3

            The statements referred to under paragraph PD-2.1.2 should be reviewed by the bank's external auditors, in accordance with International Standards on Auditing (ISA) applicable to Review engagements.

          • PD-2.1.4

            These statements (referred to under paragraph PD-2.1.2) should be published in one local newspaper within eight weeks from the statements' date.

          • PD-2.1.5

            Banks must submit a newspaper copy of the statements (referred to under paragraph PD-2.1.2) to the Agency within eight weeks from the statements' date. The copy should be accompanied by a letter clearly showing on which date and in which publication(s) the statements were published.

      • PD-3 PD-3 Quarterly disclosure requirements

        • PD-3.1 PD-3.1 Publication of reviewed (unaudited) quarterly financial statements

          • PD-3.1.1

            The content of this section is applicable only to locally incorporated banks licensed by the Agency.

          • PD-3.1.2

            Banks should prepare reviewed (unaudited) quarterly financial statements on a quarterly basis in accordance with International Accounting Standard 34 (Interim Financial Reporting). Such reviewed quarterly financial statements should be in the same form, and should be prepared on the same basis, as is required by Bahrain law for banks' annual published financial statements.

          • PD-3.1.3

            Banks' unaudited quarterly financial statements should be reviewed by their external auditors who must also make a statement regarding the results of such review. Such review and statement should be made in accordance with the International Standard on Auditing Applicable to Reviews (RSI and RS2) as established by the International Federation of Accountants.

          • PD-3.1.4

            The reviewed quarterly financial statements should be published in one Arabic and one English daily newspaper widely available in Bahrain and/or any other country in which any of its shareholders ordinarily reside, within sixty days of the end of the quarter to which such statements relate.

          • PD-3.1.5

            The published quarterly statement must also include a statement of changes in shareholders' equity (see paragraph PD-1.3.5(f))

          • PD-3.1.6

            Banks must submit a newspaper copy of the statements (referred to under paragraph PD-3.1.2) to the Agency within 60 days from the statements' date. The copy should be accompanied by a letter clearly showing on which date and in which publication(s) the statements were published.

      • PD-4 PD-4 Other public disclosure requirements

        • PD-4.1 PD-4.1 Disclosure of current effective rate of interest on consumer loans

          • PD-4.1.1

            The contents of this section are applicable to all FCBs licensed by the Agency.

          • Display of rates by conspicuous notice

            • PD-4.1.2

              The Agency requires all FCBs to display, by a conspicuous notice, their current effective rate of interest on consumer loans. This requirement does not extend to overdrafts or revolving credit facilities such as credit cards.

            • PD-4.1.3

              'Consumer loans' are defined in CM-8.3.2.

            • PD-4.1.4

              'Conspicuous notice' means a written statement in both Arabic and English languages which is easily visible and legible and is displayed in all FCB premises open to the public.

            • PD-4.1.5

              FCBs are given discretion as to how the current effective rate of interest is expressed as a calculation (e.g. as a 'base rate' or as a range of rates) as long as the conspicuous notice provides real and meaningful information to the customer.

          • Advertising of consumer loan facilities

            • PD-4.1.6

              Any advertising of consumer loan facilities offered by the banks should specify only effective rates of interest (including all fees and charges) and not flat rates.

            • PD-4.1.7

              Banks are also asked to take special care to ensure that the content of any advertising material does not mislead or deceive the public in any way.

        • PD-4.2 PD-4.2 Disclosure of base rate of interest on overdrafts and short-term loans

          • PD-4.2.1

            The content of this section is applicable to all FCBs licensed by the Agency.

          • PD-4.2.2

            The Agency requires all FCBs to display, by a conspicuous notice, their base rate of interest on BD overdrafts and short-term revolving facilities to commercial customers. For a definition of 'conspicuous notice', refer to section PD-4.1.

          • PD-4.2.3

            FCBs are left free to decide their own base rate and to make changes to it as they consider appropriate.

          • PD-4.2.4

            FCBs must display a list of current charges including any standard charges and commissions that will be applied by the bank to individual services and transactions. See section BC-4.1 for further details.

        • PD-4.3 PD-4.3 Disclosure relating to Deposit Protection Scheme

          • PD-4.3.1

            The content of this section is applicable to all FCBs licensed by the Agency.

          • PD-4.3.2

            The Agency requires all FCBs referring (directly or indirectly) to the protection of deposits in related marketing materials and in general notices featured within banking halls and in account documentation, including Annual Reports, to prominently disclose the following statement:

            "Subject to the provisions thereof, deposits held with the Bahrain office of [name of the banking firm] are covered by the Deposit Protection Scheme established by the Bahrain Monetary Agency regulation concerning the establishment of a Deposit Protection Scheme and a Deposit Protection Board".

          • PD-4.3.3

            FCBs should, in discussions and/or correspondence with new and prospective customers, bring the Deposit Protection Scheme and the protection afforded by it to the customer's notice.

          • PD-4.3.4

            The Agency welcomes the introduction by the banks, at their discretion, of other appropriate means to promote the Deposit Protection Scheme as prominently as possible.

          • PD-4.3.5

            For detailed guidance on the Deposit Protection Scheme's documentation requirements, see chapter CP-2.

      • PD-5 PD-5 Public Disclosure via the Internet

        • PD-5.1 PD-5.1 Publication and disclosure of financial results

          • Existing requirements

            • PD-5.1.1

              All locally incorporated banks are required to disclose their quarterly financial statements to the public within 60 days of the end of each quarter. Disclosure to the public should be by way of an announcement in the local press of the balance sheet and profit and loss account (with certain other additional disclosures as outlined in chapters PD-1 to PD-4).

          • Criteria for application for disclosure via the internet

            • PD-5.1.2

              Non-listed locally incorporated IBs and OBUs may apply to the Agency to disclose their quarterly financial statements via the internet. If a bank wishes to cease disclosure of quarterly financial statements via the local press, it must satisfy the following criteria:

              (a) The bank has no shareholders resident in Bahrain.
              (b) The bank has no customers resident in Bahrain. Customers include borrowers, depositors, investment account holders or persons from whom the bank earns fees or commissions. "Customers" in this context would not include other banks, but would include Bahraini corporations, the Government of Bahrain and its agencies, and private individuals (whether high net worth or not).
              (c) The bank does not market itself in any way to residents of Bahrain. In particular, the bank should not market funds or other financial products to residents, even if the bank has no on balance sheet assets or liabilities arising from Bahraini residents.

            • PD-5.1.3

              Banks meeting all of the above criteria may apply to the Agency to disclose their quarterly financial statements by way of their website instead of by way of the local press.

    • PD PD Public Disclosure Requirements [October 2007]

      This version of Module PD was replaced in April 2008. Click here for the current Module PD.

      • PD-A PD-A Introduction

        This version of Module PD was replaced in April 2008. Click here for the current Module PD.

        • PD-A.1 PD-A.1 Purpose

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • PD-A.1.1

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The purpose of this Module is to set out the rules and guidelines that the banks should adhere to in order to enhance corporate and financial transparency through better public disclosure.

            October 07

          • PD-A.1.2

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            This Module provides support for certain other parts of the Rulebook, mainly:

            (a) Principles of Business (Module PB);
            (b) High-level Controls (Module HC);
            (c) Audit Firms (Module AU);
            (d) CBB Reporting Requirements (Module BR);
            (e) Capital Adequacy (Module CA);
            (f) Business and Market Conduct (Module BC); and
            (g) Risk Management (i.e. market, credit, liquidity and operational) (Module OM).
            October 07

          • PD-A.1.3

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            This Module also provides support for certain aspects relating to disclosure requirements stipulated in the Decree No. 64 of 2006 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law') and the Bahrain Commercial Companies Law of 2001 (as amended).

            October 07

          • Legal Basis

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-A.1.4

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              This Module contains the CBB's Directive relating to public disclosure and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). The Directive in this Module is applicable to all conventional bank licensees.

              October 07

            • PD-A.1.5

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.

              October 07

        • PD-A.2 PD-A.2 Key requirements

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • General guidance and best practice

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-A.2.1

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Section PD-B.1 lists the key guidance papers on disclosure as issued by the Basel Committee on Banking Supervision and International Organisation of Securities Commissions. These papers serve as international best practice in financial and other disclosures.

              October 07

          • Annual audited financial statements (annual reports)

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-A.2.2

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Locally incorporated banks are required to publish their audited financial statements per the rules set out in the CBB law, Bahrain Commercial Companies Law of 2001 (as amended) and the Bahrain Stock Exchange regulations. The audited financial statements should be prepared in accordance with IAS.

              October 07

            • PD-A.2.3

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Locally incorporated banks must, in their Annual Reports, provide timely information which facilitates market participants' assessment of them. There are seven broad categories of information (as set out in Section PD-1.3 and Section PD-1.4), each of which should be addressed in clear terms and with appropriate details to help achieve a satisfactory level of bank transparency.

              October 07

          • Annual disclosure in the annual audited financial statements of banks listed on the Bahrain Stock Exchange (BSE)

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-A.2.4

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The Directors' Report attached to the annual financial statements of banks (referred to under Section PD-1.4) should contain details of the interests of Directors, chief executive officers and managers (persons as defined under Section HC-2.1, respectively) in the shares of such banks. Such details should include:

              (a) Total interests in the shares of such banks by individual persons mentioned above, and
              (b) Changes in such interests from the previous financial year to the current financial year.
              October 07

          • Semi-annual disclosure by commercial branches of foreign banks

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-A.2.5

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Branches (referred to under Section PD-2.2) are required by the Central Bank to prepare and disclose to the public the following information (in the same format as their Annual Audited Accounts) for their Bahrain operations on a semi-annual basis:

              (a) Balance Sheet, and
              (b) Profit and Loss Accounts
              October 07

          • Publication of reviewed (unaudited) quarterly financial statements

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-A.2.6

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Locally incorporated banks should prepare reviewed (unaudited) quarterly financial statements on a quarterly basis in accordance with International Accounting Standard 34 (Interim Financial Reporting). Such statements should be in the same form, and should be prepared on the same basis, as is required by Bahrain law for banks' annual published financial statements.

              October 07

          • Disclosure of interest rates

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-A.2.7

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The Central Bank requires all retail banks to display, by a conspicuous notice, their current effective rate of interest and charges.

              October 07

          • Disclosure relating to Deposit Protection Schemes (the 'Scheme')

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-A.2.8

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The Central Bank requires all retail banks to give prominence to the protection of deposits afforded under the Deposit Protection Scheme (see Chapter CP-2) - for example in related marketing materials and in general notices featured within banking halls and in account documentation, including audited financial statements.

              October 07

          • Public disclosure via the internet

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-A.2.9

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Non-listed locally incorporated wholesale banks may apply to the Central Bank to disclose their quarterly financial statements via the Internet. If a non-listed locally incorporated wholesale bank wishes to cease disclosure of quarterly financial statements via the local press and use the internet instead, it must satisfy the criteria in Paragraph PD-5.1.2.

              October 07

        • PD-A.3 PD-A.3 Module History

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • PD-A.3.1

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            This Module was first issued in July 2004 by the BMA as part of the conventional principles volume. Any material changes that have subsequently been made to this Module are annotated with the calendar quarter date in which the change was made: Chapter UG-3 provides further details on Rulebook maintenance and version control.

            October 07

          • PD-A.3.2

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            When the CBB replaced the BMA in September 2006, the provisions of this Module remained in force. Volume 1 was updated in October 2007 to reflect the switch to the CBB; however, new calendar quarter dates were only issued where the update necessitated changes to actual requirements.

            October 07

          • PD-A.3.3

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The most recent changes made to this Module are detailed in the table below:

            Summary of changes

            Module Ref. Change Date Description of Changes
            PD-5 Jan 2005 New Internet Disclosure rules.
            PD-4.1 Jul 2005 Small definition change to consumer loans.
            PD-2.1, PD-3.1 Jan 2006 Revised notification requirements for disclosures.
            PD-3.1 April 2006 Specific requirements to disclose changes in shareholders' equity.
            PD-A.1.4 10/2007 New Rule PD-A.1.4 introduced categorising this Module as a Directive.
            PD-1.3 10/2007 New Rule PD-1.3.12 requiring disclosure of penalties paid
            October 07

          • Evolution of the Module

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-A.3.4

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Prior to the development of this Rulebook, the Central Bank had issued various circulars representing regulations covering different aspects of public disclosure requirements. These circulars have now been consolidated into this Module covering regulations relating to public disclosure requirements. These circulars and their evolution into this Module are listed below:

              Circular Ref. Date of Issue Module Ref. Circular Subject
              EDBC/14/96 17 Jan 1996 PD-B.2 Public Disclosure of the Trading and Derivatives Activities of Banks and Securities Firms.
              BC/2/99 21 Feb 1999 PD-1.3, PD-3.2 Public Disclosure.
              BC/3/02 13 Mar 2002 PD-1.3 Additional Public Disclosure Requirements Amended Version – 2002.
              no reference(partial) Apr 1981 PD-1.5 Precious Metals and Commodities.
              CBB/751/93 8 Jul 1993 PD-1.1, PD-1.3, PD-1.4, PD-3.2 Directors' Interest in the Shares of, and the Unaudited Quarterly Financial Statements of, Locally Incorporated Banks Quoted on the Bahrain Stock Exchange.
              EDBC/782/93 17 Jul 1993 PD-1.1 The Interests of Directors, Chief Executive and Senior Managers in the Shares of Locally Incorporated Banks Quoted on the Bahrain Stock Exchange.
              BC/1/99 22 Feb 1999 PD-2.2 Enhancing Bank Transparency.
              OG/73/02 17 Feb 2002 PD-4.2 Duty to Display Current Effective Rate of Interest.
              OG/50/92 4 Mar 1992 PD-4.2 Consumer Finance.
              OG/107/01 3 Mar 2001 PD-4.3 Disclosure of BD Interest Rates
              OG/425/94 21 Dec 1994 PD-4.4 Deposit Protection
              OG/423/93 28 Nov 1993 PD-4.4 Deposit Protection Scheme (the 'Scheme')
              October 07

          • Effective date

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-A.3.5

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The contents in this Module are effective from the date depicted in the original circulars (see Paragraph PD-A.3.4) or from the date of change shown in PD-A.3.3.

              October 07

      • PD-B PD-B General guidance and best practice

        This version of Module PD was replaced in April 2008. Click here for the current Module PD.

        • PD-B.1 PD-B.1 Guidance provided by other international bodies

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • Basel Committee on Banking Supervision: Various papers

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-B.1.1

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The papers below are to be taken as guidance by licensees in order to improve public disclosure practices.

              October 07

            • PD-B.1.2

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The Basel Committee on Banking Supervision has issued various papers in relation to the subject matter of this Module. These papers are listed as below:

              •   'Enhancing Bank Transparency' – September 1998 (see www.bis.org/publ/bcbs41.pdf)
              •   'Sound Practices for Loan Accounting and Disclosure' – July 1999 (see www.bis.org/publ/bcbs55.pdf)
              •   'Best Practices for Credit Risk Disclosure' – September 2000 (see www.bis.org/publ/bcbs74.pdf)
              October 07

            • PD-B.1.3

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              In addition, the Basel Committee, in conjunction with the International Organisation of Securities Commissions (IOSCO) has issued the following papers that relate to the subject matter of this Module:

              •   'Public Disclosure of the Trading and Derivatives Activities of Banks and Securities Firms' – November 1995 (see www.iosco.org document no. IOSCOPD48)

              •   'Recommendations for Public Disclosure of Trading and Derivatives Activities of Banks and Securities Firms' – October 1999 (see www.bis.org/publ/bcbs48.pdf )

              •   'Intra-group Transactions and Exposure Principles' – December 1999 (see www.bis.org/publ/bcbs62.pdf)

              •   'Risk Concentrations Principles' – December 1999 (see www.bis.org/publ/bcbs43.pdf)

              October 07

      • PD-1 PD-1 Annual disclosure requirements

        This version of Module PD was replaced in April 2008. Click here for the current Module PD.

        • PD-1.1 PD-1.1 Introduction

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • PD-1.1.1

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The purpose of this Chapter is to set out the Central Bank's requirements relating to the disclosure of information in the bank's annual audited financial statements ('Annual Report'). This Chapter also refers to the Bahrain Commercial Companies Law of 2001 (as amended) and the Bahrain Stock Exchange regulations relating to public disclosure and reporting requirements.

            October 07

          • PD-1.1.2

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            For the purpose of this Module, the following definitions apply:

            (a) 'Director' includes any person who occupies the position of a Director and any person who appears to the Central Bank to be a Director (howsoever called) of the applicant/licensed locally incorporated bank and its subsidiaries;
            (b) 'Chief Executive/General Manager' means a person who is responsible under the immediate authority of the Directors for the conduct of the applicant/licensed locally incorporated bank, including its subsidiaries and overseas branches, and Bahrain branches of foreign banks;
            (c) 'Manager' means a person who, under the immediate authority of a Director or the chief executive/general manager, exercises major managerial functions or is responsible for maintaining accounts or other records of the applicant/licensed bank; and
            (d) 'Interest in the shares' shall include, but not be limited to, direct and/or indirect ownership of such shares, the right of voting associated with such shares, the right to receive dividends payable on such shares, and/or any right, regardless of the form thereof, to purchase (or otherwise acquire an interest in) such shares at any time.
            October 07

        • PD-1.2 PD-1.2 Publication of annual audited financial statements (Annual Reports)

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • PD-1.2.1

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            Locally incorporated banks are required to publish their audited financial statements per the rules set out in the CBB law, Bahrain Commercial Companies Law of 2001 (as amended) and the Bahrain Stock Exchange regulations (this latter obligation only applies to banks listed on the Bahrain Stock Exchange). The audited financial statements should be prepared in accordance with IAS.

            October 07

        • PD-1.3 PD-1.3 Disclosure in the annual audited financial statements (Annual Reports)

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • Introduction

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-1.3.1

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Banks (referred to under Section PD-1.2) should, in their Annual Reports, provide timely information which facilitates market participants' assessment of them. There are seven broad categories of information (as set out in Paragraphs PD-1.3.5 to PD-1.3.11 and Section PD-1.4), each of which should be addressed in clear terms and with appropriate details to help achieve a satisfactory level of bank transparency.

              October 07

            • PD-1.3.2

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The disclosure requirements listed in Paragraphs PD-1.3.5 to PD-1.3.11 and Section PD-1.4 below are in addition to or serve to clarify the disclosure requirements of IASs. These requirements may be:

              (a) Integrated into the Notes to the Accounts; or
              (b) Addressed in the Directors' Report.
              October 07

            • PD-1.3.3

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The Central Bank requires that all banks referred to under Section PD-1.2 should maintain an up-to-date checklist of all applicable International Accounting Standards (IASs) (including disclosure requirements) and the requirements set out in this Section for full compliance purposes.

              October 07

            • PD-1.3.4

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              If a bank is not able to achieve full compliance with the requirements stated in this Chapter, a meeting should be held with the Director of Banking Supervision Directorate at the Central Bank in the presence of the concerned external auditors to discuss the reasons for such non-compliance prior to the finalization of the Annual Report.

              October 07

          • Financial performance and position

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-1.3.5

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The following information relating to the financial performance and position of the bank should be included:

              (a) Discussion of the main factors that influenced the bank's financial performance for the year, explaining any differences in performance between the current year and previous years and the reasons for such changes, and discussing factors that will have a significant influence on the bank's future financial performance;
              (b) Basic quantitative indicators of financial performance such as ROAE, ROAA, NIM, cost-to-income ratios etc. for the past 5 years;
              (c) A discussion of the impact of acquisitions of new businesses;
              (d) Quantitative information about own funds and its components (tier-1, tier-2. tier-3 capital), risk weighted assets, risk asset ratio and debt to equity ratio both on an average basis over the period and at year end;
              (e) The impact of changes in the capital structure on earnings and dividends;
              October 07

          • Corporate governance and transparency

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-1.3.6

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The following information relating to corporate governance should be included in the bank's Annual Report:

              (a) Information about the Board structure (e.g. the size of the Board, Board committees, and membership), and the basic organisational structure (lines of business structure and legal entity structure);
              (b) Information about the profession, business title, and experience in years of each Board member and the qualifications and experience in years of senior executives, including Chairmen, Chief Executives and General Managers (see Section PD-1.1 for definitions);
              (c) Descriptive information on:
              (i) The managerial structure, including:
              1. committees (see Section HC-1.3 for detailed disclosure requirements relating to various types of committees),
              2. segregation of duties,
              3. reporting lines, and
              4. responsibilities;
              (ii) Incentive structure (remuneration policies, executive compensation, stock options, etc.);
              (iii) The structure and organisation of the credit risk management function, including the loan review function; and
              (iv) Other related internal controls including internal audit;
              (d) Nature and extent of transactions with affiliates and related parties;
              (e) Approved Board's communications strategy (including the use of the bank's website) which should undertake to perform at least the following:
              (i) The disclosure of all relevant information to stakeholders on a timely basis in a timely manner; and
              (ii) The provision of at least the last three years of financial data on the bank's website.
              Banks are encouraged to maintain a website. If a bank does not have a website, it must state in its strategy how it will make all relevant information available to shareholders and stakeholders on a timely basis; and
              (f) Information about any changes in the structures (as mentioned in Paragraphs PD-1.3.6(a) to PD-1.3.6(c) above) from prior periods.

              October 07

          • Risk management strategies and practices

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-1.3.7

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The following information relating to the bank's risk management strategies and practices should be included in the Annual Report:

              (a) Discussion of the overall risk management philosophy, overall policy and methodologies, the nature of risks in activities and how risks arise in those activities, how (in high-level terms) these risks are managed and controlled; and
              (b) Discussion of risk measurement and monitoring processes, the use of risk-mitigating tools (collateral, guarantees, credit insurance, netting agreements, managing concentrations, credit derivatives), limits (e.g., credit limits, market risk limits), and periodic review of exposures.
              October 07

          • Credit risk exposures

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-1.3.8

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The following information relating to credit risk should be included in the bank's Annual Report:

              (a) Details on how the bank manages credit risk and information on whether or not strategies used have been effective;
              (b) Descriptive information about the business lines that create credit risk, the bank's strategies regarding those business lines, and the nature and composition of the exposures that arise;
              (c) The magnitude of the bank's current credit exposure on an aggregate basis, as well as its significant components; and
              (d) Quantitative and qualitative information on the use of credit scoring and portfolio credit risk measurement models. More specifically, descriptive information about the types of models, portfolio(s) covered and size of portfolio(s), and quantitative and qualitative information about the credit risk measurement models used, including model parameters (e.g. holding period, observation period, confidence interval etc.), their performance over time, model validation, back testing and stress testing information;
              (e) Summary information about internal rating processes and explanation of the loss concept used and how internal ratings are used in the bank's internal capital allocation process, and based on these internal credit rating processes, summary information on the quality of on- and off-balance sheet credit exposures, including a discussion of counterparty and internal credit rating (information about credit exposures based on external rating is encouraged, however, proprietary information is not expected);
              (f) High-level descriptive information on the techniques and methods used for managing past due and impaired assets, including the procedures for credit quality classifications and practices and procedures to determine provisions and to evaluate the adequacy of credit loss provisions (both general and specific);
              (g) Quantitative information about gross positions by major business segments (e.g. lending, investments, trading, leasing and off-balance sheet exposures). Such information should include current and future potential exposures, (e.g. for guarantees given and derivatives etc) where appropriate. In addition, maturity breakdowns should be provided (these should be consistent with the maturity bands as required under IAS but should also be extended to include 5-10 years, 10-20 years and 20 years and over), as well as average balances for the current period (as distinct from end of period balances) where materially different;
              (h) Quantitative information about the composition of on- and off-balance sheet credit exposures to:
              (i) Major types of counterparty, including domestic and foreign governments, domestic and foreign corporates, consumers, and other financial institutions (such information should be provided without taking account of the effects of credit risk mitigation techniques),
              (ii) Intragroup transactions and exposures to related parties, Directors and shareholders (separately identified) and whether such transactions have been made on an arms length basis, and
              (iii) Highly leveraged institutions and other high-risk counterparties (separately disclosed);
              (i) Quantitative information concerning concentrations of credit risk, and the magnitude of concentrations of credit exposures in different types of counterparty;
              (j) Comprehensive quantitative information about the non-performing loans or other impaired and past due loans:
              (i) Ageing schedule (over 3 months, over 1 year, and over 3 years) of past due loans and other assets
              (ii) Breakdown by relevant asset Category, counterparty type and geographic area, and
              (iii) Where applicable, specific, general and other provisions on the major asset categories;
              (k) Aggregate quantitative information about credit facilities that have been restructured, during the period, including:
              (i) The balance of any restructured loans,
              (ii) The magnitude of any restructuring activity,
              (iii) The impact of restructured credit facilities on provisions and present and future earnings, and
              (iv) The basic nature of concessions on all credit relationships that are restructured, including loans, derivatives and other on- and off-balance sheet activities,
              If full repayment is expected, the restructured credit need not be disclosed in this Section after satisfactory performance for a period of six months in accordance with the modified terms;
              (l) An individual breakdown of movement of general and specific provisions and interest in suspense, and the key methodologies assumptions behind how these provisions are determined (including historical experience, current market conditions and trends);
              (m) Quantitative and qualitative information about the use of credit derivatives and other instruments (e.g. netting agreements and guarantees received) that mitigate and reallocate credit risk. Information should include:
              (i) Discussion of how instruments are used, including strategy and objectives,
              (ii) Notional amounts and fair value of instruments,
              (iii) Amount of credit risk bought and/or sold,
              (iv) Breakdown by type of instrument (e.g., total return swap, credit default swap, or other credit derivatives), and
              (v) Where instruments are recorded (i.e., trading vs. banking book);
              (n) Quantitative information on securitised assets under the management of the bank, the amount and type of assets securitised, and the amount of risks or assets retained, details of subordinated or first loss assets retained, and any other recourse provisions; and
              (o) Quantitative information concerning obligations with respect to recourse transactions (i.e. where the asset has been sold, but the bank retains responsibility for repayment if the original counterparty defaults or fails to fulfil obligations). Information should include the amount of the assets sold and any expected losses.
              October 07

          • Market risk exposures

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-1.3.9

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The following information relating to market risk should be included in the bank's Annual Report:

              (a) Detailed quantitative information about the nature and extent of interest rate-sensitive assets and liabilities and off- balance sheet exposures (e.g. breakdown of fixed and floating rate items and the net interest margin earned, and the duration and effective interest rates of assets and liabilities). These disclosures should also identify classes of assets and liabilities, and related gains and losses, in addition to the effect on the value of assets, liabilities and economic equity for a given specific change in interest rates;
              (b) Summarised quantitative information for significant concentrations of foreign exchange exposure by currency, broken down by hedged and unhedged exposures;
              (c) Summarised quantitative information about price related market risk exposure (Value-at-Risk) (i.e., to equity, commodity and other markets), including:
              (i) The magnitude of the exposure on a weekly or monthly basis,
              (ii) The maximum and minimum values in the reporting period,
              (iii) The end-of-period values, and
              (iv) The assumptions (and or models) used in calculations (e.g.. confidence level, holding period, etc.);
              (d) A histogram (or similar presentation) of the overall daily profits or exposures for aggregate market risk over the reporting period. As an absolute minimum, summarised aggregate quantitative information relating to monthly VaR results giving an overview of the extent of market risk related activities should be presented; and
              (e) Information showing the performance of any VaR models for the period, in particular giving the number of times actual losses exceeded the VaR estimates of the model(s).
              October 07

          • Other risk exposures

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-1.3.10

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The following information relating to other risks should be included in the bank's Annual Report:

              (a) Quantitative information about investments in foreign subsidiaries (as included in the Financial Statements Section and representing foreign currency translation risk) supplemented by a discussion about:
              (i) The nature of the related currency exposure,
              (ii) How that exposure has changed from year to year,
              (iii) Foreign exchange translation effects thereon,
              (iv) The earnings impact of foreign exchange transactions, and
              (v) The effectiveness of risk management (hedging) strategies;
              (b) Qualitative information about the main types of operational risks including any specific problem that is considered to be individually significant, and how the bank manages and controls such risk;
              (c) Quantitative information on any material legal contingencies, including pending legal actions, and a discussion and estimate of the potential liabilities, in addition to qualitative information about how the bank manages and controls such risks.
              October 07

          • Compliance

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-1.3.11

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The Annual Report should include a declaration by the external auditors that no violations have taken place of:

              (a) The Bahrain Commercial Companies Law of 2001 (as amended);
              (b) The CBB Law that might have had a material effect on the business of the bank or on its financial position; and
              (c) The licensing and authorisation requirements and other rules and regulations issued by the Central Bank.

              In so far as the violations have any material impact on the financial statements of the bank.

              October 07

            • PD-1.3.12

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The Annual Report must disclose the amount of any penalties paid to the Central Bank during the period of the report together with a factual description of the reason(s) given by the Central Bank for the penalty (see Section EN-1.3). Failure to comply with this requirement will mean that the concerned bank will be required to make the disclosure in the subsequent quarterly financial statement and in the subsequent annual financial statement. A financial penalty for non-disclosure will also be levied upon the concerned bank.

              October 07

        • PD-1.4 PD-1.4 Additional disclosure in the annual audited financial statements of banks listed on the Bahrain Stock Exchange (BSE)

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • PD-1.4.1

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The content of this Section is applicable only to locally incorporated banks listed on the Bahrain Stock Exchange (BSE).

            October 07

          • PD-1.4.2

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The disclosure requirements set out in this Section for banks referred to under Paragraph PD-1.4.1 are in addition to those set out in Section PD-1.3.

            October 07

          • Interests of Directors, chief executive officers and managers

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-1.4.3

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Without prejudice to any other requirement of Bahrain law (or any other direction of the Central Bank), the Directors' Report Section of the annual audited financial statements of banks should contain details of the interests of Directors, chief executive officers and managers (persons as defined under Section PD-1.1, respectively) in the shares of such banks. Such details should include:

              (a) Total interests in the shares of such banks by individual persons mentioned above, and
              (b) Changes in such interests from the previous financial year to the current financial year.
              October 07

            • PD-1.4.4

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              For the purpose of the disclosure required under Paragraph PD-1.4.3, any interests in the shares of a bank held by the spouse(s) or children of a Director, or any other person the control of whose interests in such shares lies ultimately with the Director, shall be deemed to be the interests of the relevant Director. For a definition of 'interest in the shares', see Paragraph PD-1.1.2(d).

              October 07

        • PD-1.5 PD-1.5 Disclosure relating to precious metals and commodities trading activities (deleted)

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • PD-1.5.1

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            This Section no longer applies.

            October 07

      • PD-2 PD-2 Semi-annual disclosure requirements

        This version of Module PD was replaced in April 2008. Click here for the current Module PD.

        • PD-2.1 PD-2.1 Disclosure by commercial branches of foreign banks

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • PD-2.1.1

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The content of this Section is applicable only to retail banks branches (licensed by the Central Bank) of foreign banks.

            October 07

          • PD-2.1.2

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            Banks (referred to under Paragraph PD-2.1.1) are required by the Central Bank to prepare and disclose to the public the following information (in the same format as their Annual Audited Accounts) for their Bahrain operations on a semi-annual basis:

            (a) Balance Sheet, and
            (b) Profit and Loss Accounts.
            October 07

          • PD-2.1.3

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The statements referred to under Paragraph PD-2.1.2 should be reviewed by the bank's external auditors, in accordance with International Standards on Auditing (ISA) applicable to Review engagements.

            October 07

          • PD-2.1.4

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            These statements (referred to under Paragraph PD-2.1.2) should be published in one local newspaper within eight weeks from the statements' date.

            October 07

          • PD-2.1.5

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            Banks must submit a newspaper copy of the statements (referred to under Paragraph PD-2.1.2) to the Central Bank within eight weeks from the statements' date. The copy should be accompanied by a letter clearly showing on which date and in which publication(s) the statements were published.

            October 07

      • PD-3 PD-3 Quarterly disclosure requirements

        This version of Module PD was replaced in April 2008. Click here for the current Module PD.

        • PD-3.1 PD-3.1 Publication of reviewed (unaudited) quarterly financial statements

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • PD-3.1.1

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The content of this Section is applicable only to locally incorporated banks licensed by the Central Bank.

            October 07

          • PD-3.1.2

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            Banks should prepare reviewed (unaudited) quarterly financial statements on a quarterly basis in accordance with International Accounting Standard 34 (Interim Financial Reporting). Such reviewed quarterly financial statements should be in the same form, and should be prepared on the same basis, as is required by Bahrain law for banks' annual published financial statements.

            October 07

          • PD-3.1.3

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            Banks' unaudited quarterly financial statements should be reviewed by their external auditors who must also make a statement regarding the results of such review. Such review and statement should be made in accordance with the International Standard on Auditing Applicable to Reviews (RSI and RS2) as established by the International Federation of Accountants.

            October 07

          • PD-3.1.4

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The reviewed quarterly financial statements should be published in one Arabic and one English daily newspaper widely available in Bahrain and/or any other country in which any of its shareholders ordinarily reside, within sixty days of the end of the quarter to which such statements relate.

            October 07

          • PD-3.1.5

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The published quarterly statement must also include a statement of changes in shareholders' equity as required by international accounting standards.

            October 07

          • PD-3.1.6

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            Banks must submit a newspaper copy of the statements (referred to under Paragraph PD-3.1.2) to the Central Bank within 60 days from the statements' date. The copy should be accompanied by a letter clearly showing on which date and in which publication(s) the statements were published.

            October 07

      • PD-4 PD-4 Other public disclosure requirements

        This version of Module PD was replaced in April 2008. Click here for the current Module PD.

        • PD-4.1 PD-4.1 Disclosure of current effective rate of interest on consumer loans

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • PD-4.1.1

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The contents of this Section are applicable to all retail banks licensed by the Central Bank.

            October 07

          • Display of rates by conspicuous notice

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-4.1.2

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              The Central Bank requires all retail banks to display, by a conspicuous notice, their current effective rate of interest on consumer loans. This requirement does not extend to overdrafts or revolving credit facilities such as credit cards.

              October 07

            • PD-4.1.3

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              'Consumer loans' are defined in CM-8.3.2.

              October 07

            • PD-4.1.4

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              'Conspicuous notice' means a written statement in both Arabic and English languages which is easily visible and legible and is displayed in all retail banks' premises open to the public.

              October 07

            • PD-4.1.5

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Retail banks are given discretion as to how the current effective rate of interest is expressed as a calculation (e.g. as a 'base rate' or as a range of rates) as long as the conspicuous notice provides real and meaningful information to the customer.

              October 07

          • Advertising of consumer loan facilities

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-4.1.6

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Any advertising of consumer loan facilities offered by the banks should specify only effective rates of interest (including all fees and charges) and not flat rates.

              October 07

            • PD-4.1.7

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Banks are also asked to take special care to ensure that the content of any advertising material does not mislead or deceive the public in any way.

              October 07

        • PD-4.2 PD-4.2 Disclosure of base rate of interest on overdrafts and short-term loans

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • PD-4.2.1

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The content of this Section is applicable to all retail banks licensed by the Central Bank.

            October 07

          • PD-4.2.2

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The Central Bank requires all retail banks to display, by a conspicuous notice, their base rate of interest on BD overdrafts and short-term revolving facilities to commercial customers. For a definition of 'conspicuous notice', refer to Section PD-4.1.

            October 07

          • PD-4.2.3

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            Retail banks are left free to decide their own base rate and to make changes to it as they consider appropriate.

            October 07

          • PD-4.2.4

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            Retail banks must display a list of current charges including any standard charges and commissions that will be applied by the bank to individual services and transactions. See Section BC-4.1 for further details.

            October 07

        • PD-4.3 PD-4.3 Disclosure relating to Deposit Protection Scheme

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • PD-4.3.1

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The content of this Section is applicable to all retail banks licensed by the Central Bank.

            October 07

          • PD-4.3.2

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The Central Bank requires all retail banks referring (directly or indirectly) to the protection of deposits in related marketing materials and in general notices featured within banking halls and in account documentation, including Annual Reports, to prominently disclose the following statement:

            •  Subject to the provisions thereof, deposits held with the Bahrain office of [name of the banking firm] are covered by the Deposit Protection Scheme established by the Central Bank of Bahrain regulation concerning the establishment of a Deposit Protection Scheme and a Deposit Protection Board'.
            October 07

          • PD-4.3.3

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            Retail banks should, in discussions and/or correspondence with new and prospective customers, bring the Deposit Protection Scheme and the protection afforded by it to the customer's notice.

            October 07

          • PD-4.3.4

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            The Central Bank welcomes the introduction by the banks, at their discretion, of other appropriate means to promote the Deposit Protection Scheme as prominently as possible.

            October 07

          • PD-4.3.5

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            For detailed guidance on the Deposit Protection Scheme's documentation requirements, see Chapter CP-2.

            October 07

      • PD-5 PD-5 Public Disclosure via the Internet

        This version of Module PD was replaced in April 2008. Click here for the current Module PD.

        • PD-5.1 PD-5.1 Publication and disclosure of financial results

          This version of Module PD was replaced in April 2008. Click here for the current Module PD.

          • Existing requirements

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-5.1.1

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              All locally incorporated banks are required to disclose their quarterly financial statements to the public within 60 days of the end of each quarter. Disclosure to the public should be by way of an announcement in the local press of the balance sheet and profit and loss account (with certain other additional disclosures as outlined in Chapters PD-1 to PD-4).

              October 07

          • Criteria for application for disclosure via the internet

            This version of Module PD was replaced in April 2008. Click here for the current Module PD.

            • PD-5.1.2

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Non-listed locally incorporated IBs and OBUs may apply to the Central Bank to disclose their quarterly financial statements via the internet. If a bank wishes to cease disclosure of quarterly financial statements via the local press, it must satisfy the following criteria:

              (a) The bank has no shareholders resident in Bahrain.
              (b) The bank has no customers resident in Bahrain. Customers include borrowers, depositors, investment account holders or persons from whom the bank earns fees or commissions. 'Customers' in this context would not include other banks, but would include Bahraini corporations, the Government of Bahrain and its agencies, and private individuals (whether high net worth or not).
              (c) The bank does not market itself in any way to residents of Bahrain. In particular, the bank should not market funds or other financial products to residents, even if the bank has no on balance sheet assets or liabilities arising from Bahraini residents.
              October 07

            • PD-5.1.3

              This version of Module PD was replaced in April 2008. Click here for the current Module PD.

              Banks meeting all of the above criteria may apply to the Central Bank to disclose their quarterly financial statements by way of their website instead of by way of the local press.

              October 07