BR-A.1.1

The purpose of this Module is to set out the Central Bank of Bahrain's (CBB') reporting requirements applicable to the banks as part of the CBB's on-going supervision activities.

BR-A.1.2

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

BR-A.1.3

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

BR-A.1.4

This Module contains the CBB's Directive (as amended from time to time) relating to reporting requirements of the CBB 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 conventional bank licensees.

BR-A.1.5

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

BR-A.2.1

In accordance with Article 111 of the CBB Law, all licensed banks must provide all information that the CBB may reasonably request in order to discharge its regulatory obligations.

BR-A.2.2

All Bahraini Conventional Banks Licensees in the Kingdom of Bahrain are required to submit to the CBB their annual audited financial statements (in compliance with the provisions set out under Section BR-1.1) no later than 3 months of the end of the bank's financial year. In addition, these banks are also required to submit supplementary information (as listed under Section BR-1.1) to the CBB.

BR-A.2.3

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

BR-A.2.4

All Bahrain retail branches of foreign banks are required to submit to the CBB 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 2 months from the reporting period end.

BR-A.2.5

All Bahraini Conventional Banks Licensees in the Kingdom of Bahrain are required to submit to the CBB the following information on a quarterly basis:

BR-A.2.6

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

BR-A.2.7

[This Paragraph was deleted July 2011].

BR-A.2.8

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

BR-A.2.8A

All banks licensed by the CBB in the Kingdom of Bahrain are required to report monthly to the CBB of all payments and transfers of funds amounting to BD 3,000 or above from accounts held by the bank for charitable organisations registered in the Kingdom of Bahrain (as required under Paragraphs BR-4.1.5 and FC-1.6.4).

BR-A.2.9

All Bahraini Conventional Banks Licensees listed on the Bahrain Stock Exchange are required to report to the Capital Markets Supervision Directorate of the CBB, on a monthly basis, information relating to their Directors' interests in the shares of Bahraini Conventional Banks Licensees listed on the Bahrain Stock Exchange and submit exposures to connected counterparties to Banking Supervision Directorate (in accordance with the provisions set out under Section BR-4.3).

BR-A.2.9A

All banks licensed by the CBB are required to complete online non-financial information related to their institution by accessing the CBB's institutional information system (IIS) (as required under Section BR-4A.1).

BR-A.2.10

All banks licensed by the CBB in the Kingdom of Bahrain are required to notify and report to the CBB on the following matters in Section BR-5.1:

BR-A.2.11

All Bahraini Conventional Banks Licensees are required to give the CBB immediate written notification of any actual breach by such bank of the minimum Risk Asset Ratio(s) (RAR) and to consult with the CBB prior to entering into any term borrowing arrangements (Section BR-5.2).

BR-A.2.12

All retail banks licensed by the CBB in the Kingdom of Bahrain are required to notify the CBB on the introduction of new and expanded customers and products (Section BR-5.3).

BR-A.2.13

Conventional bank licensees must clearly indicate the purpose of any communication addressed to the CBB. In cases of lack of response to such communication by the CBB, the licensee must not infer or assume implied acceptance, approval or acknowledgement of the contents of such communication.

BR-A-3.4

The contents in this Module are effective from the date shown at the foot of the page or from the date of changes shown in BR-A.3.3.

BR-1.1.2

All Bahraini Conventional Banks Licensees are required to submit to the CBB their annual audited financial statements within 3 months from the financial year end.

BR-1.1.2A

All Bahraini Conventional Banks Licensees are required to submit to the CBB their draft year-end financial statements and must attend a meeting at the CBB with their supervisory point of contact (SPOC) and their external auditor to discuss such statements. The bank must obtain their audit committee's prior approval of the draft financial statements before submitting these to the CBB. Subsequent to the meeting with the CBB, the financial statements (subject to any adjustments) must be submitted to the Board for its approval and to the shareholders at the annual general meeting for ratification.

BR-1.1.3

In addition to the statements required in Paragraph BR-1.1.2, banks are also required to submit to the CBB the following information within 3 months of their financial year end:

BR-1.1.3A

In instances where a bank has non-operational subsidiaries, the bank should contact its supervisory point of contact at the CBB to establish whether the requirements of Subparagraph BR-1.1.3(c) are applicable.

BR-1.1.3B

[This Paragraph was deleted in April 2023].

BR-1.1.3C

Banks are required to submit to the CBB an agreed upon procedures report concerning the annual disclosures required by Module PD, Section PD-1.3 and Chapter PD-6 (see also AU-3.2.3) within 4 months of their financial year end.

BR-1.1.4

In addition to the provisions of Section AU-3.7, the audited financial statements or the annual report of these banks should be in full compliance with:

BR-1.1.5

Banks are reminded that they must submit a soft copy (electronic) of their full annual report to the CBB within 4 months of the end of their financial year (See PD-1.2.6).

BR-1.2.2

All branches, referred to under Paragraph BR-1.2.1, are required to submit to the CBB their annual audited financial statements of their Bahrain operations within 3 months from the financial year end. Such accounts must be prepared in a format agreed between the branch and its external auditor.

BR-1.2.3

In addition to the statements required in Paragraph BR-1.2.2, branches are also required to submit to the CBB within 3 months from their financial year end the following information:

BR-1.2.3A

Branches of foreign banks are also required to submit to the CBB the head office's Annual Report within 1 month of the date of publication and distribution by the head office.

BR-1.2.4

If specific provisions against the assets of a branch are maintained in the books of its head office, the CBB 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.

BR-1.2.5

The audited financial statements must be in full compliance with the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS).

BR-2.1.2

Branches (referred to under Paragraph BR-2.1.1) are required to submit to the CBB their reviewed semi-annual (interim) financial statements (in the same format as their Annual Audited Accounts) for their Bahrain operations within 2 months of the date of these statements.

BR-2.1.2A

All retail branches of foreign banks must submit to the CBB at least 5 working days prior to the intended publication date, the following documents:

BR-2.1.3

The statements mentioned under Paragraph BR-2.1.2 must be in compliance with the requirements set out under Section PD-2.1.

BR-2.2.2

The financial statements mentioned under Paragraph BR-3.1.8 should be in compliance with the requirements set out under Section PD-3.1.

BR-2.2.3

In addition to the financial statements required in Paragraph BR-3.1.8, banks are also required to submit to the CBB the following information within two months of the end of the half-year:

BR-2.2.4

When acting as an issuer, promoter or manager of a private placement of securities, Bahraini conventional bank licensees must provide on a semi-annual basis to investors and the CBB a progress report on the private placement. The semi-annual reports are to be provided as of 30^th June and 31^st December and must be submitted to the investors and the CBB within three months of the reporting period.

BR-2.2.5

The reports referred to in Paragraph BR-2.2.4 are to be issued following the issuance or distribution of a PPM for the solicitation of funds from investors.

BR-2.2.6

The requirements for the report on private placements are in addition to any requirements outlined in Module OFS (Offering of Securities) under Volume 6 (Capital Markets).

BR-2.2.7

Bahraini conventional bank licensees may opt to issue the required report on a more frequent basis.

BR-2.2.8

The report required under Paragraph BR-2.2.4 must be issued for private equity purchases of existing companies as well as for real estate and other projects under development and must follow the requirements of Appendix BR-18 under Part B of Volume 1.

BR-2.3.2

[This Paragraph was deleted in April 2019].

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 quarterly basis. This form is intended to be a financial report of the bank. Banks should therefore include on it all assets and liabilities of their head office and their branches in Bahrain and abroad and subsidiaries where applicable. Separate figures in respect of the head office or 'Bahrain operations' are not required.

BR-3.1.3

Please refer to the relevant International Accounting and Financial Reporting Standards for definitions, accounting and consolidation requirements applicable to subsidiaries.

BR-3.1.4

The forms referred to under Paragraphs BR-3.1.2 must be submitted to the CBB on a quarterly basis within 30 calendar days of the end of the reporting date.

BR-3.1.5

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

BR-3.1.6

The CBB requires all banks to request their external auditor to conduct a review of the prudential returns on a quarterly basis. The results of such review (in the form of an Agreed Upon Procedures report as shown in Appendix BR 9) must be submitted to the CBB no later than 2 months from the end of the subject quarter.

BR-3.1.7

Banks which demonstrate to the satisfaction of the CBB that they have fulfilled all of the CBB's requirements with regard to Prudential Returns for at least two consecutive quarters may apply (in writing) to the CBB for an exemption from the review procedure set out in Paragraph BR-3.1.6 above. Such exemption may be withdrawn by the CBB at any time, should errors be detected.

BR-3.1.7A

For Bahraini conventional bank licensees, all existing exemptions in respect of PIR review as at 31st December 2014 will cease.

BR-3.1.7B

[This Paragraph was deleted in July 2021].

BR-3.1.8

All banks, referred to under Paragraph BR-3.1.1, are required to submit to the CBB reviewed (unaudited) quarterly financial statements (in the same format as their Annual Audited Accounts) on a quarterly basis (within 2 months of the date of these statements).

BR-3.1.8A

All Bahraini conventional bank licensees must submit to the CBB at least 5 working days prior to the intended publication date and before their board of directors' meeting to discuss the interim financial statements, the following documents:

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-3.1.

BR-3.1.9A

All Bahraini conventional bank licensees must submit to the CBB details of their largest country exposures on a consolidated basis through Electronic Submission of Returns and Analysis of Data (ESRAD). This report must be submitted to the CBB within 20 calendar days of the end of the relevant quarter.

BR-3.1.10

All Bahraini conventional bank licensees must submit to the CBB details of their large exposures in accordance with Appendix BR-19. This report must be submitted to the CBB within 20 calendar days of the end of the relevant quarter.

BR-3.1.11

All Bahraini conventional bank licensees must submit to the CBB details of their overseas banking subsidiaries and branches in accordance with Appendix BR-8. This report must be submitted to the CBB within one month of the end of the relevant quarter.

BR-3.1.11A

All Bahraini conventional bank licensees must submit to the CBB reviewed statement of financial position and income statement of their non-banking subsidiaries. If reviewed statements are unavailable, management accounts will be accepted by the CBB. These statements are to be submitted within one month of the end of the relevant quarter.

BR-3.1.12

In accordance with Paragraph BC-9.7.1, all banks must submit to the CBB Consumer Protection Unit, 20 days after the end of the quarter, a report on complaints.

BR-3.2.2

All branches, referred to under Paragraph BR-3.2.1, are required by the CBB to complete PIR forms (see Appendix BR-5) in accordance with guidelines set out under Appendix BR-3.

BR-3.2.3

These should be submitted to the CBB no later than 30 calendar days from the end of the said quarter.

BR-3.2.4

The CBB requires all banks to request their external auditor 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 CBB no later than 2 months 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 CBB that they have fulfilled all of the CBB's requirements with regard to Prudential Returns for at least two consecutive quarters may apply (in writing) to the CBB for an exemption from the review procedure set out in Paragraph BR-3.2.4 above.

BR-3.2.5A

All retail branches of foreign banks must submit the completed Form: Information Required for Annual and Interim Financial Review (Appendix BR-21) prepared in accordance with Appendix BR-20 together with the PIR forms within 30 calendar days (See Paragraph BR-3.2.3) or together with any draft financial statement submissions (See Paragraph BR-2.1.2A).

BR-3.2.5B

All wholesale branches of foreign banks must submit the completed Form: Information Required for Annual and Interim Financial Review (Appendix BR-21) prepared in accordance with Appendix BR-20, together with the PIR forms within 30 calendar days of each quarter end (See Paragraph BR-3.2.3).

BR-3.2.6

In accordance with Paragraph BC-9.7.1, all banks must submit to the CBB Consumer Protection Unit, 20 days after the end of the quarter, a report on complaints.

BR-3.3.2 [deleted]

BR-3.3.3 [deleted]

BR-4.1.2

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

(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 CBB in electronic form (Excel spreadsheet) via email to erdsr@cbb.gov.bh no later than the 10^th of the month following the end of the relevant month.

BR-4.1.4

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

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 retail banks. They may apply, however, to wholesale banks, if they undertake on-shore business (cf. Section LR-1.2).

BR-4.1.5

All banks, referred to under Paragraph BR-4.1.1, must report to the CBB all payments and transfers 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 Paragraph FC-1.6.4). Such report must include details of amount transferred, account name and number, and beneficiary (name and location).

BR-4.3.2

All locally incorporated banks listed on a licensed exchange are required to report to the Capital Markets Supervision Directorate of the CBB the following information, on a monthly basis, relating to their Directors:

BR-4.3.3

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

BR-4.3.4

All banks, referred to under Paragraph BR-4.3.1, are required to submit to the CBB their exposures to connected parties on a monthly basis on the fourth working day of the month.

(For instructions relating to the reporting of the above mentioned exposures, refer to Appendix BR-12 and for the concerned reporting forms refer to Appendix BR-11).

BR-4.3.5

Bahraini conventional bank licensees must submit their "solo" LCR to the CBB within 7 calendar days following the month end, and their consolidated LCR within 14 calendar days following the month end (see Appendix BR-23) through Electronic Submission of Returns and Analysis of Data (ESRAD).

BR-4A.1.1

All banks licensed by the CBB are required to complete online non-financial information related to their institution by accessing the CBB's institutional information system (IIS). Banks must update the required information at least on a quarterly basis or when a significant change occurs in the non-financial information included in the IIS. If no information has changed during the quarter, the bank must still access the IIS quarterly and confirm the information contained in the IIS. Licensees must ensure that they access the IIS within 20 calendar days from the end of the related quarter and either confirm or update the information contained in the IIS.

BR-4A.1.2

Banks failing to comply with the requirements of Paragraph BR-4A.1.1 or reporting inaccurate information are subject to financial penalties or other enforcement actions as outlined in Module (EN) Enforcement.

BR-4A.6.2

Conventional retail bank licensees acting as AISPs/PISPs must submit the information required under Appendix OB-1 under Volume 5 to the CBB within 2 weeks of each month end.

BR-5.1.2

Should any locally incorporated 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 CBB for its consideration, and action should be taken immediately to bring the exposure back within applicable limits as soon as possible.

BR-5.1.3

[This Paragraph was moved to Section BR-5.2]

BR-5.1.4

[This Paragraph was deleted in April 2012].

BR-5.1.5

The CBB must also be notified of any changes to the positions mentioned under Paragraph LR-1A.1.2 that may occur from time to time subject to observing the requirements set out in Section LR-1A.1. (See also Paragraph LR-1A.1.22).

BR-5.1.6

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

BR-5.1.7

[This Paragraph was deleted in July 2018].

BR-5.1.8

The appointment of a compliance manager/officer requires the CBB's prior approval (refer to Section LR-1A.1 for full details). The bank must outline how the compliance function fits into the bank's senior management reporting structure, and must give details of relevant reporting lines within the bank.

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 CBB 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.

BR-5.1.10

[This Paragraph was deleted in April 2022].

BR-5.1.11

[This Paragraph was deleted in January 2022].

BR-5.1.12

The CBB 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.

BR-5.1.13

All banks must report immediately to the CBB 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 CBB has not, then they have a duty to report the matter personally to the CBB. All such cases shall be treated in the strictest confidence by the CBB.

BR-5.1.14

All banks must report immediately to the CBB 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%.

BR-5.1.15

[This requirement was moved in October 2011 to Paragraph BR-4.1.5 as it is a monthly requirement].

BR-5.1.16

All banks must refer to Section GR-4.1 on business transfer requirements.

BR-5.1.17

Banks must inform the CBB, in writing, of the following:

BR-5.1.17A

Should the CBB have a cause for concern following its review of the notification referred to under Subparagraph BR-5.1.17(c), it may investigate the matter and should it establish the existence of any irregularity, misconduct or unfair decisions, it may take enforcement action on the bank, including an adverse action on the fit and proper status of the person(s) responsible.

BR-5.1.18

[This Paragraph was moved to Paragraph BR-5.2.12.]

BR-5.2.2

All banks, referred to under Paragraph BR-5.2.1, must give the CBB immediate written notification of any actual breach by such banks of the minimum capital adequacy ratio (CAR) in accordance with Section CA-1.2. Where such notification is given, the bank must also adhere to the additional notification and reporting requirements as set out under Section CA-1.2.

BR-5.2.3

All banks must notify the CBB of any write-off of a credit facility in excess of BD100,000 (or equivalent in other currencies) and must obtain the CBB's prior approval for write-offs concerning certain parties connected to the concerned bank or other entities (see Section CM-7.1 for full details).

BR-5.2.4

All banks must consult with the CBB before they enter into any term borrowing facilities or programs which have any restrictive covenants in relation to the capital or activities of the bank (such as the capital adequacy ratio, capital amount, leveraging, compliance with certain regulatory requirements, etc). For the sake of expediting the CBB's reaction to such consultations, banks must submit the draft term sheet of the facility to the Banking Supervision director at the CBB responsible for the supervision of the concerned bank, before committing themselves to the concerned facility (or renewing it).

BR-5.2.5

All Bahraini conventional bank licensees must obtain the CBB's prior written approval for the opening of any new place of business either in the Kingdom of Bahrain or abroad (this would include the establishment or acquisition of a subsidiary, new branches or representative offices). Bahraini conventional bank licensees should refer to Article 51 of the CBB Law 2006 for full details.

BR-5.2.6

All Bahraini conventional bank licensees must obtain the CBB’s prior written approval for any proposed capital increase in a subsidiary and for any major change (regardless of type and/or effect) to the bank’s strategy or corporate plan prior to implementation (See also Paragraph HC-1.2.6).

BR-5.2.7

All Bahraini conventional bank licensees must obtain the CBB's prior specific written approval if they intend to act as originator, sponsor or manager of a special purpose vehicle ('SPV'), or if they intend to participate in the creation of an SPV, or if they intend to acquire a holding of 20% or more of the equity capital of an SPV. All Bahraini conventional bank licensees must seek prior specific written CBB approval if they are appointed as nominee shareholders of SPVs or hold votes by proxy arrangement in SPVs on behalf of other investors.

BR-5.2.9A

In addition to the points noted in BR-5.2.9, Bahraini conventional bank licensees which are involved with SPVs in any of the relationships described in Paragraph BR-5.2.7 must:

BR-5.2.8

For purposes of Paragraph BR-5.2.7, in order to avoid any delays and/or disruption in implementation of a Bahraini conventional bank licensee's plan in this context, the CBB should be approached as soon as possible, even at a very preliminary stage.

BR-5.2.9

The CBB requires any Bahraini conventional bank licensee associated with an SPV to confirm the following points in any request for approval under Paragraph BR-5.2.7:

BR-5.2.10

Where the SPV is consolidated into the accounts of a Bahraini conventional bank, the bank must provide separate accounting information on the SPV to the CBB on a quarterly basis. Furthermore, the annual audited financial statements of all consolidated SPVs must be submitted to the CBB within 3 months of the year end of the concerned SPV.

BR-5.2.11

Where a Bahraini conventional bank has a controller or majority ownership relationship with an SPV, or acts as sponsor, the bank must obtain the prior written approval of the CBB for any changes to the capital, ownership, management or control of SPV. All Bahraini conventional banks must also notify the CBB of any material events in relation to the SPV. If necessary, the CBB may require that formal information exchange arrangements are put in place (e.g. a memorandum of understanding) if the SPV is located in a foreign jurisdiction and its activities are not supervised locally.

BR-5.2.12

In accordance with Paragraph CA-2.1.6(e) and (g) and CA-2.1.10(e), Bahraini conventional bank licensees must seek the CBB's prior written approval before exercising a call on an additional Tier one or Tier two capital issue, partially or in full, prior to the end of its term.

BR-5.3.2

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

BR-5.3.3

In accordance with Section BC-6.1, all banks referred to under Paragraph BR-5.3.1, must notify the CBB in writing if they installed or removed an ATM in Bahrain.

BR-5.3.4

In accordance with Paragraph BC-4.11.3, retail banks must notify the CBB in instances where donated funds have been received by an NGO and no valid funds collection license was submitted.

BR-6.1.4

The CBB may ask banks to provide it with information at the request of or on behalf of other supervisors to enable them to discharge their functions properly. Those supervisors may include overseas supervisors or government agencies in Bahrain. The CBB may also, without notifying a bank, pass on to those supervisors or agencies information that it already has in its possession.

BR-6.5.1

The content of this Chapter is applicable to all banks and appointed experts.

BR-6.5.2

The purpose of the contents of this Chapter is to set out the roles and responsibilities of appointed experts when appointed pursuant to Articles 114 or 121 of the CBB Law (see EN-7.1.1). These Articles empower the CBB to assign some of its officials or others to inspect or conduct investigations of banks.

BR-6.5.3

The CBB uses its own inspectors to undertake on-site examinations of licensees as an integral part of its regular supervisory efforts. In addition, the CBB may commission reports on matters relating to the business of licensees in order to help it assess their compliance with CBB requirements. Inspections may be carried out either by the CBB's own officials, by duly qualified appointed experts appointed for the purpose by the CBB, or a combination of the two.

BR-6.5.4

The CBB will not, as a matter of general policy, publicise the appointment of an appointed expert, although it reserves the right to do so where this would help achieve its supervisory objectives.

BR-6.5.5

Unless the CBB otherwise permits, appointed experts should not be the same firm appointed as external auditor of the bank.

BR-6.5.6

Appointed experts will be appointed in writing, through an appointment letter, by the CBB. In each case, the CBB will decide on the range, scope and frequency of work to be carried out by appointed experts.

BR-6.5.7

All proposals to appoint appointed experts require approval by an Executive Director or more senior official of the CBB. The appointment will be made in writing, and made directly with the appointed experts concerned. A separate letter is sent to the licensee, notifying them of the appointment. At the CBB's discretion, a trilateral meeting may be held at any point, involving the CBB and representatives of the licensee and the appointed experts, to discuss any aspect of the investigation.

BR-6.5.8

Following the completion of the investigation, the CBB will normally provide feedback on the findings of the investigation to the bank.

BR-6.5.9

Appointed experts will report directly to and be responsible to the CBB in this context and will specify in their report any limitations placed on them in completing their work (for example due to the bank's group structure). The report produced by the appointed experts is the property of the CBB (but is usually shared by the CBB with the firm concerned).

BR-6.5.10

Compliance by appointed experts with the contents of this Chapter will not, of itself, constitute a breach of any other duty owed by them to a bank (i.e. create a conflict of interest).

BR-6.5.11

The CBB may appoint one or more of its officials to work on the appointed experts' team for a bank.

BR-6.5.12

The scope of the required report will be determined and detailed by the CBB in the appointment letter. Commissioned appointed experts would normally be required to report on one or more of the following aspects of a bank's business:

BR-6.5.13

Appointed experts will be required to form an opinion on whether, during the period examined, the bank is in compliance with the relevant provisions of the CBB Law and the CBB's relevant requirements, as well as other requirements of Bahrain Law and, where relevant, industry best practice locally and/or internationally.

BR-6.5.14

The appointed experts' report should follow the format set out in Appendix BR-13, in part B of the CBB Rulebook.

BR-6.5.15

Unless otherwise directed by the CBB or unless the circumstances described in Section BR-6.5.19 apply, the report must be discussed with the Board of directors and/or senior management in advance of it being sent to the CBB.

BR-6.5.16

Where the report is qualified by exception, the report must clearly set out the risks which the bank runs by not correcting the weakness, with an indication of the severity of the weakness should it not be corrected. Appointed experts will be expected to report on the type, nature and extent of any weaknesses found during their work, as well as the implications of a failure to address and resolve such weaknesses.

BR-6.5.17

If the appointed experts conclude, after discussing the matter with the bank, that they will give a negative opinion (as opposed to one qualified by exception) or that the issue of the report will be delayed, they must immediately inform the CBB in writing giving an explanation in this regard.

BR-6.5.18

The report must be completed, dated and submitted, together with any comments by directors or management (including any proposed timeframe within which the bank has committed to resolving any issues highlighted by the report), to the CBB within the timeframe applicable.

BR-6.5.19

Appointed expertsmust communicate to the CBB, during the conduct of their duties, any reasonable belief or concern they may have that any of the requirements of the CBB, including the criteria for licensing a bank (see Module LR), are not or have not been fulfilled, or that there has been a material loss or there exists a significant risk of material loss in the concerned bank, or that the interests of customers are at risk because of adverse changes in the financial position or in the management or other resources of a bank. Notwithstanding the above, it is primarily the bank's responsibility to report such matters to the CBB.

BR-6.5.20

The CBB recognises that appointed experts cannot be expected to be aware of all circumstances which, had they known of them, would have led them to make a communication to the CBB as outlined above. It is only when appointed experts, in carrying out their duties, become aware of such a circumstance that they should make detailed inquiries with the above specific duty in mind.

BR-6.5.21

If appointed experts decide to communicate directly with the CBB in the circumstances set out in Paragraph BR-6.5.19, they may wish to consider whether the matter should be reported at an appropriate senior level in the bank at the same time and whether an appropriate senior representative of the bank should be invited to attend the meeting with the CBB.

BR-6.5.22

Information which is confidential and has been obtained under, or for the purposes of, this chapter or the CBB Law may only be disclosed by the CBB in the circumstances permitted under the Law. This will allow the CBB to disclose information to appointed experts to fulfil their duties. It should be noted, however, that appointed experts must keep this information confidential and not divulge it to a third party except with the CBB's permission and/or unless required by Bahrain Law.

BR-6.5.23

The CBB may, at its discretion, call for a trilateral meeting(s) to be held between the CBB and representatives of the relevant bank and the appointed experts. This meeting will provide an opportunity to discuss the appointed experts' examination of, and report on, the bank.

PD-A.1.5

This Module contains the CBB s Directive (as amended from time to time) relating to public disclosure and disclosure to shareholders and is issued pursuant to the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ( CBB Law ). It also incorporates the requirements of Article 62 of the CBB law with respect to the publication of financial statements. The Directive in this Module is applicable to all Bahraini conventional bank licensees (and branches of foreign banks where applicable).

PD-A.1.6

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

PD-A.4.3

The contents in this Module are effective from July 2004 or from the effective date of the summary of changes as shown in the table in paragraph PD-A.4.2. Changes to Chapter PD-6 are effective 1st January 2011.

PD-B.1.1

[This Paragraph was deleted in July 2015.]

PD-B.1.2

[This Paragraph was deleted in July 2015.]

PD-B.1.3

[This Paragraph was deleted in July 2015.]

PD-1.2.1

All Bahraini conventional bank licensees must submit their annual audited financial statements to the CBB within 3 months of the end of the bank's financial year (as required by Amended: July 2015
Amended: April 2011
Amended October 2010
April 2008