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  • BC-4 BC-4 Customer Account Services and Charges

    • BC-4.1 BC-4.1 Minimum Balance and Charges on Savings Accounts [This Section was deleted in April 2018]

      • BC-4.1.1

        [This paragraph was deleted in April 2018].

        Deleted: April 2018
        October 07

      • BC-4.1.2

        [This paragraph was deleted in April 2018].

        Deleted: April 2018
        October 07

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

      • BC-4.2.1

        The purpose of the contents of this Section is to set out rules governing the issue of Dinar Certificates of Deposit by retail bank licensees.

        October 07

      • BC-4.2.2

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

        October 07

      • Issue

        • BC-4.2.3

          Dinar Certificates of Deposit may be issued only by retail bank licensees and must be payable at their offices in Bahrain.

          October 07

        • BC-4.2.4

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

          October 07

        • BC-4.2.5

          Retail bank licensees may not issue Certificates of Deposit until they receive the necessary funds.

          October 07

      • Denominations

        • BC-4.2.6

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

          October 07

      • Maturities

        • BC-4.2.7

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

          October 07

      • Interest Rates

        • BC-4.2.8

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

          October 07

        • BC-4.2.9

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

          October 07

        • BC-4.2.10

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

          October 07

        • BC-4.2.11

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

          October 07

        • BC-4.2.12

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

          October 07

      • Negotiability

        • BC-4.2.13

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

          October 07

      • Safe Custody

        • BC-4.2.14

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

          October 07

      • Reserve Ratio

        • BC-4.2.15

          Outstanding Certificates of Deposit are subject to reserve requirements in accordance with the provisions set out under Section BR-4.1.

          Amended: October 2013
          October 07

      • Other Conditions

        • BC-4.2.16

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

          October 07

        • BC-4.2.17

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

          October 07

    • BC-4.3 BC-4.3 Disclosure of Charges by Retail Banks

      • BC-4.3.1

        In order to improve retail customer awareness and enhance transparency of retail banks charging structures, all retail banks must display in a prominent position, in Arabic and in English, by notice in their banking halls (both head offices and branches), a list of all applicable charges.

        Amended: October 2012
        Amended: April 2011
        October 07

      • BC-4.3.2

        Retail banks must also ensure that each customer is in receipt of their current list of charges, by enclosing such a list with account statements and displaying such charges on their websites. The list must specify standard charges and commissions that will be applied by the retail bank to individual services and transactions and to specific areas of business. Such notification must be made in instances where there are changes in the fees or when new fees are introduced.

        Amended: April 2013
        Amended: October 2012
        October 2007

      • Credit Agreements

        • BC-4.3.4

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

          (a) Credit agreement – Means all instalment financing agreements and lease agreements, as well as credit cards, overdraft, revolving and other types of credit offered to retail customers;
          (b) Customer – Means both the debtor and the guarantor (if any) and/or any potential debtor or guarantor;
          (c) Conspicuous notice – Means a written statement in both Arabic and English languages which is easily visible and legible and displayed in all retail banks' premises open to the public (head offices and branches), and via means such as websites, newspapers and other press notices;
          (d) Nominal annual rate – Means the interest rate charged to the customer, calculated by dividing the amount of the total interest by the amount of the funds provided to the customer and excluding any other charges, the results of which is divided by the number of years of the term of the credit agreement;
          (e) Outstanding credit amount – Means the amount outstanding under a credit agreement representing the amount of funds provided to the customer and any other charges that are included as part of the principal amount to be repaid by the customer over the duration of the agreement less any repayment made related to the principal amount at a specified date;
          (f) Principal – Means the amount of credit received plus any other charges, the total of which is subject to interest; and
          (g) Retail customers – Means a natural person.
          Added: October 2012

        • BC-4.3.3

          A retail bank must make available, at their premises, information leaflets containing information on the key products and services in respect of all credit agreements including:

          (a) The Annual Percentage Rate (APR) as defined in Paragraph BC-4.3.10, for instalment financing facilities only; and
          (b) The annual interest rate on credit facilities (as referred to in Paragraph BC-4.3.14), commission, fees, one-off charges, expenses on behalf of third parties, exchange rates applied and any other charges.
          Amended: October 2012
          Amended: July 2012
          Amended: April 2011
          October 07

      • General Rules

        • BC-4.3.5

          Where a retail customer has a credit agreement with a retail bank, retail banks must:

          (a) Duly inform their customers in accordance with this Module about the nature and the characteristics (including relevant risks) of the credit agreements and services offered by them, and about the terms and conditions governing such agreements;
          (b) Periodically inform, in writing, their customers on the evolution and the terms of any credit agreement signed, throughout the duration of the contract (refer to Paragraphs BC-4.3.24 and BC-4.3.25);
          (c) Respond in due time, to customers' requests for the provision of information and clarifications regarding the application of contractual terms (refer to Paragraphs BC-4.3.29 and BC-4.3.30);
          (d) Appoint a customer complaints officer and publicise his/ her contact details (refer to Chapter BC-9 on Customer Complaints Procedures);
          (e) Ensure the proper training of employees involved in interfacing and providing specific information to customers;
          (f) Disclose information required in this document in both Arabic & English languages;
          (g) Show clearly the APR for instalment facilities and the annual rate of interest for other credit facilities on the credit agreement application and 'key terms disclosure' document; and
          (h) Disclose all information in a clear and readable form (refer to Paragraph BC-4.3.6).
          Added: October 2012

        • BC-4.3.6

          Marketing of customer credit agreements, advertising and sales promoting credit agreements, irrespective of the media used (SMS, Internet, printed material, telephone solicitation) must be clear and understandable, must be true and not misleading and meet the basic customer information requirements as defined in this Module. Retail 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.

          Amended: July 2021
          Added: October 2012

        • BC-4.3.7

          The use of "small print" to make potentially important information less visible is not compatible with good business conduct, and should be avoided.

          Added: October 2012

      • Minimum Disclosure Requirements

        • BC-4.3.8

          Retail banks must make:

          (a) Public disclosure regarding credit agreements; and
          (b) Disclosures to individual customer(s), whether these be during the course of the initial negotiation of the credit agreement or during the term of the facility being offered.
          Added: October 2012

      • Public Disclosure Requirements for all Credit agreements

        • BC-4.3.9

          The following public disclosures must be made by conspicuous notice for all types of credit agreements:

          (a) Any obligation on the part of the customer to open a deposit account with the retail bank as a condition of granting the credit agreement;
          (b) Any late payment charges;
          (c) The level of fees for any special services rendered, or one-off expenses, as well as any amount collected by retail banks on behalf of third parties;
          (d) Any fees or charges payable under any linked or mandatory contract entered into as a condition for the granting of the credit agreement, such as payment protection insurance; and
          (e) Any other charges not included above.
          Added: October 2012

      • Additional Public Disclosure for Instalment Financing Facilities

        • BC-4.3.10

          In addition to the requirements under Paragraph BC-4.3.9, retail banks must publicly disclose by conspicuous notice for instalment financing facilities:

          (a) The current Annual Percentage Rate (APR) as calculated using the APR methodology in Paragraph BC-4.3.31. The APR displayed must be calculated based on the following scenarios. In case of consumer finance, amount borrowed is BD10,000 for a 7-year term and for housing facilities, BD100,000 for 25 years.
          (b) The Annual Percentage Rate (APR), must be broken down as follows:
          (i) The annual nominal interest rate payable on the instalment financing;
          (ii) Administration/handling fees;
          (iii) In the case of finance lease contracts/ijara or deferred purchase contracts, any fees for purchasing the asset; and
          (iv) Any other mandatory charges (contingent costs are excluded); and
          (c) The terms and conditions for early repayment, partial or full, of the credit agreement, or for any change in the terms and covenants of the credit agreement, as well as any relevant charges (where permitted) and the way in which these are calculated.
          Added: October 2012

        • BC-4.3.11

          The APR is a standard measure that allows customers to compare total charges for instalment financing facilities on a like-for-like basis. The APR allows the customer to compare the total charge for credit over differing periods (e.g. – two versus three years) or offered by different retail banks with differing payment profiles and taking into account the payment of any other fees payable as a condition of the contract, such as administration fees or insurance premiums.

          Added: October 2012

        • BC-4.3.12

          Any advertising through any media means of instalment financing facilities, offered by the retail banks must specify only the APR (including all fees and charges) and no other rates, i.e. nominal, base, flat or rates by any other names.

          Added: October 2012

        • BC-4.3.13

          For the purposes of Paragraph BC-4.3.10, the disclosures can be provided as one APR or a range of APRs for retail banks that provide instalment financing to different segments and products. A retail bank may have different customer segments with different risk profiles, for whom the APR offered on the same product may vary. However, the disclosures must comply with the scenarios outlined in Subparagraph BC-4.3.10(a).

          Added: October 2012

      • Additional Public Disclosure for Credit Agreements other than Instalment Financing Facilities

        • BC-4.3.14

          In addition to the requirements under Paragraph BC-4.3.9, retail banks must publicly disclose by conspicuous notice for Credit Agreements other than instalment financing facilities:

          (a) For credit cards, the monthly and the annual rate of interest plus other fees and charges;
          (b) For overdrafts, the annual rate of interest plus other fees and charges;
          (c) For floating-rate credit agreements, the interest rate clearly defined on the basis of the relevant base rate, the periods during which this rate would apply, as well as information on key factors that could affect the total cost of the credit agreement; and
          (d) For instances where the customer exceeds contractual credit lines, the terms and any relevant charges.
          Added: October 2012

        • BC-4.3.15

          For credit agreements other than instalment financing facilities, any advertising through any media means must specify only the annual interest rate and other fees and charges.

          Added: October 2012

        • BC-4.3.16

          For credit agreements other than instalment financing facilities, banks are prohibited from using the term APR in any advertising.

          Added: October 2012

      • Disclosure to Individual Customers: Initial Disclosure Requirements of Key Terms

        • BC-4.3.17

          Retail banks must make clear to potential customers, prior to entering into a credit agreement, all relevant key terms of the agreement in the credit agreement application and 'key terms disclosure' document, in order for them to clearly understand the characteristics of the services and products on offer. Retail banks must also comply with the disclosure requirements under the "Code of Best Practice on Consumer Credit and Charging" (see Appendix CM-2).

          Added: October 2012

        • BC-4.3.18

          The above "key terms disclosure" document must be summarised in plain English and Arabic. This document must be signed and dated by the customer(s) in duplicate as having been read and understood, prior to signing a credit agreement. One copy should be retained by the customer and the other must be retained by the retail bank in their customer file.

          Added: October 2012

        • BC-4.3.19

          For credit agreements where a retailer extends credit to purchase goods or services by operating in agreement with retail banks, all conditions of the credit agreement must be disclosed in the credit agreement application and 'key terms disclosure' document, including when interest will begin to accrue, along with information on any indirect charges.

          Added: October 2012

        • BC-4.3.20

          Credit agreements, referred to in Paragraph BC-4.3.19, must be finalised with an employee of the retail bank, whether located at the premises of the retailer or at the premises of the retail bank providing the credit. Interest must in no event be charged before the disbursement of funds.

          Added: October 2012

        • BC-4.3.21

          Retail banks must inform the customers on the nature of their contractual relationship with the retail outlet and the customers' rights arising as a result of this relationship.

          Added: October 2012

        • BC-4.3.22

          In addition to the initial disclosure of key terms noted in Paragraphs BC-4.3.17 to BC-4.3.21, the "key terms disclosure" document must at the time of signing the credit agreement, amongst other things, make clear:

          (a) The detailed breakdown of the payments:
          (i) The principal amount being borrowed, the interest per month and the maturity of the credit agreement;
          (ii) The net amount provided to the customer after deducting or applying any upfront or other charges;
          (iii) The total interest payments and principal repayment for the term of the credit agreement; and
          (iv) The total administration/handling fees and any other fees and charges spread over the term of the credit agreement.
          (b) The APR and the nominal annual rate as defined in Paragraphs BC-4.3.10 and BC-4.3.4(d) respectively;
          (c) Whether the rate of interest is fixed or can be varied, and under what circumstances;
          (d) The basis on which interest is charged (e.g. actual reducing balance) and applied to the account (e.g. monthly or quarterly compounding) and whether principal repayments are taken into account in the calculation, together with an illustration of the calculation method;
          (e) The detailed costs associated with "top-ups" of credit agreements or other alternative arrangements for extending additional credit or early repayments, whether partial or full, of amounts due including the treatment of remaining interest and the payment of premium for insurance;
          (f) Any late payment charges;
          (g) The annual interest rate and credit limit being offered for credit agreements such as credit cards and overdrafts; and
          (h) Any other charges related to the credit agreement not included above.
          Amended: January 2019
          Added: October 2012

        • BC-4.3.23

          Retail banks are free to design the layout and wording to be used in their 'key terms disclosure' document, as they see fit, providing they contain the information specified in Paragraph BC-4.3.22. The CBB will monitor compliance with the spirit as well as the letter of the requirements in this Chapter.

          Added: October 2012

      • Disclosure to Individual Customers: During the Term of the Credit Agreement

        • BC-4.3.24

          Retail banks must, at the time of signing the credit agreement, give the clients information on the payment schedule of the credit agreement, including the breakdown of principal, interest and other charges per month for the whole life of the facility. Information must be given, free of charge, at least on a semi-annual basis, unless the period of debt servicing is shorter or where there exists a prior agreement on a more frequent basis.

          Amended: January 2019
          Added: October 2012

        • BC-4.3.25

          In addition to the requirements under Paragraph BC-4.3.24, when credit is granted through credit cards or overdraft facilities, monthly statements must be provided and include information on minimum payment.

          Added: October 2012

        • BC-4.3.25A

          Retail bank licensees must, when billing their customers, reflect the card transactions without rounding off the amounts in Fils. Retail bank licensees must collaborate with acquirers and Visa/MasterCard network schemes to ensure that there is no rounding off in any transaction irrespective of the currency of the transaction.

          Added: January 2019

      • Variation Disclosures Requirements

        • BC-4.3.26

          Retail banks must disclose to the customer in advance, either collectively or individually, all relevant changes or variations to a credit agreement. The circumstances in which a customer must be provided with variation disclosures are:

          (a) If both the retail bank and customer agree to change the credit agreement; in this case, the customer must be provided in writing with full particulars of the change, at least seven calendar days before it takes effect; and
          (b) If the credit agreement gives the retail bank power to vary fees or charges, the amount or timing of payments, the interest rate or the way interest is calculated, and the retail bank decides to exercise that power, the customer must be provided with full particulars of the change, including an updated schedule of the total interest payments and principal repayment for the remaining term of the credit agreement, at least thirty calendar days prior to the date the change takes effect. Such notice is to enable the customer to decide whether to accept the new terms or terminate the agreement by settling the outstanding credit amount, in accordance with relevant provisions therein, which must have been stated in a clear and understandable manner.
          Added: October 2012

        • BC-4.3.27

          Any increase of the interest rate or the amount of any fee or charge payable under a credit agreement, must be disclosed publicly, by conspicuous notice, at least thirty calendar days prior to the date the change takes effect by:

          (a) Displaying the information prominently at the retail bank's place of business; and
          (b) Posting the information on the retail bank's website.
          Added: October 2012

        • BC-4.3.28

          Any deferral of interest or principal announced by the retail bank must also take account of the APR methodology as shown in Paragraphs BC-4.3.31 to BC-4.3.33, and the new APR must be given to the client or made public in advertisements.

          Added: October 2012

      • Request Disclosure

        • BC-4.3.29

          The retail bank must provide a reply to any request for disclosure within fifteen business days of receiving the request.

          Added: October 2012

        • BC-4.3.30

          Disclosures requested by the customer may include but are not limited to any or all of the following information about a credit agreement:

          (a) The effect of part prepayment on the customer's obligations;
          (b) Full particulars of any changes to the agreement since it was made;
          (c) The amount of any fee payable on part prepayment and how the fee will be calculated;
          (d) The amount required for full prepayment on a specified date and how the amount will be calculated;
          (e) The outstanding credit amount, including any outstanding interest charge (calculated at the date the disclosure statement is prepared);
          (f) The amount of payments made or to be made or the method of calculating the amount of those payments;
          (g) The number of payments made or to be made (if ascertainable);
          (h) How often payments are to be made;
          (i) The total amount of payments to be made under the agreement, if ascertainable; and
          (j) A copy of any disclosure statement that was or should have been provided before the request was made.
          Added: October 2012

        • BC-4.3.31

          The APR must be calculated using the following methodology:

          K=m K'=m'
          Σ   Ak
          (1 + i) tk =             		Σ   A'k'
          (1 + i) tk'  
          K=1 K'=1
          Added: October 2012

        • BC-4.3.32

          The meaning of letters and symbols used in the above formula are:

          K is the number identifying a particular advance of credit;
          K' is the number identifying a particular instalment;
          Ak is the amount of advance K;
          A'k' is the amount of instalment K;
          Σ represents the sum of all the terms indicated;
          m is the number of advances of credit;
          m' is the total number of instalments;
          tk is the interval, expressed in years between the relevant date and the date of advance K;
          tk' is the interval expressed in years between the relevant date and the date of instalment K';
          i is the APR, expressed as a decimal.
          Added: October 2012

        • BC-4.3.33

          For the purpose of this Chapter, the 'relevant date' is the earliest identifiable date on which the borrower is able to acquire anything which is the subject of the agreement (e.g. delivery of goods), or otherwise the 'relevant date' is the date on which the credit agreement is made.

          Added: October 2012

    • BC-4.4 BC-4.4 Accounts Held for Clubs and Societies in Bahrain [This Section was deleted in January 2013 as requirements are covered under Section FC-1.6]

      • BC-4.4.1

        [This Paragraph was deleted in January 2013].

        Deleted: January 2013

      • BC-4.4.2

        [This Paragraph was deleted in January 2013].

        Deleted: January 2013

      • BC-4.4.3

        [This Paragraph was deleted in January 2013].

        Deleted: January 2013

    • BC-4.5 BC-4.5 Current Accounts

      • BC-4.5.1

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

        Amended: January 2011
        October 07

      • BC-4.5.2

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

        October 07

    • BC-4.6 BC-4.6 Brokerage Fees

      • BC-4.6.1

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

        October 07

      • BC-4.6.2

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

        October 07

      • BC-4.6.3

        For the list of brokerage fees, see Appendix BC-6.

        October 07

    • BC-4.7 BC-4.7 Notification to the CBB on Introduction of New or Changes to Customer Products and Facilities

      • BC-4.7.1

        [This Paragraph was deleted in October 2016.]

        Deleted: October 2016
        Amended: October 2012
        Amended: January 2011
        October 07

      • BC-4.7.2

        All retail banks licensed by the CBB are required to notify the CBB before the introduction of any new products or services or any changes in existing product/service. The CBB will respond to the concerned bank within one week of receipt of the notification if it has any observations on the new application.

        Amended: October 2016
        Amended: January 2011
        October 07

      • BC-4.7.2A

        The reference to changes to customer products refers to the structure, features, risk profile in terms and conditions in existing product/service refers to changes that will have an additional financial cost to the customers.

        Added: October 2016

      • BC-4.7.3

        [This Paragraph was deleted in October 2011].

        Deleted: October 2011
        Amended: April 2011
        Amended: January 2011
        October 07

    • BC-4.8 BC-4.8 Dealing with Inheritance Claims

      • BC-4.8.1

        Licensees must ensure that no transfer of legal ownership of financial assets is made until they have sight of documentation (which must be duly copied for their records) from the Ministry of Justice and Islamic Affairs confirming the entitlement of a person or persons to inherit from the deceased. Such documentation must be complied with precisely. Particular care must be taken where minors (children) or other people lacking full legal capacity are named as inheritors.

        Amended: October 2012
        Amended: October 2011
        Amended: January 2011
        October 07

      • BC-4.8.2

        Without prejudice to Paragraph BC-4.8.1, financial assets may be distributed to the order of an individual provided that individual is named in a mandate, duly certified by the Ministry of Justice and Islamic Affairs, as having the permission to act on behalf of all of the inheritors.

        Amended: October 2012
        Amended: October 2011
        Amended: January 2011
        October 07

    • BC-4.9 BC-4.9 Compliance with the Code of Best Practice on Consumer Credit and Charging

      • BC-4.9.1

        Conventional bank licensees must comply with the Code of Best Practice on Consumer Credit and Charging as attached in Appendix CM-2 and the Investment Business Code of Practice requirements in this Chapter throughout the lifetime of their relationship with a customer.

        Adopted: April 2008

      • BC-4.9.2

        Conventional bank licensees must take responsibility for compliance with the above requirements by all persons carrying out regulated banking services on their behalf. Conventional bank licensees must put in place appropriate measures across all their business operations and distribution channels to ensure compliance with the requirements of the Code of Best Practice on Consumer Credit and Charging where relevant.

        Adopted: April 2008

    • BC-4.10 BC-4.10 Transaction Advice

      • BC-4.10.1

        All retail banks must provide at no charge, a transaction advice service for its customers (natural persons). This service information must be communicated through short message service (SMS) on all types of withdrawals/deductions from customer's account and any credit and pre-paid card transaction, including, but not limited to:

        (a) ATM withdrawals;
        (b) Internal and external transfers from the customer's account/credit and pre-paid cards;
        (c) Withdrawals through a bank counter;
        (d) Point of sale (POS) transactions;
        (e) Any withdrawals and payments from the customer's account and credit and pre-paid-cards through mobile, internet or other electronic means;
        (f) Any repayment of outstanding credit card balances; and
        (g) Any other withdrawals or deductions from the customer's account and credit and pre-paid cards.
        Amended: October 2016
        October 2011

      • BC-4.10.2

        [Deleted in October 2016 as per EDBS/KH/34/2016 letter dated 28th July 2016].

        Deleted: October 2016
        October 2011

    • BC-4.11 BC-4.11 Donations to NGO Accounts

      • BC-4.11.1

        All retail banks must waive any administrative fees when transferring donated funds from the donor accounts to the accounts of NGOs registered with the Ministry of Social Development (MoSD), provided that a valid funds collection license is presented to the bank by the concerned NGO.

        Added: April 2014

      • BC-4.11.2

        All retail banks must refrain from transferring any funds, collected by way of donations or fund raising, to the account of any society or club where the NGO has not submitted a valid written fund collection license to the bank, as required under Paragraph BC-4.11.1.

        Added: April 2014

      • BC-4.11.3

        Banks must notify the CBB in instances where donated funds have been received and no valid license was submitted. The CBB will then inform the MoSD accordingly.

        Added: April 2014

      • BC-4.11.4

        NGOs, including societies and clubs, registered with the MoSD, and having fund collection licenses, are listed in the NGOs fund collection directory, available on the website of the MoSD.

        Added: April 2014

      • BC-4.11.5

        NGOs registered with the MoSD and holding a fund collection license must present such license to the concerned banks in order for the related administration fee to be waived.

        Added: April 2014

      • BC-4.11.6

        Administration fees will be waived by the banks only for the period of the validity of the funds collection license.

        Added: April 2014

    • BC-4.12 BC-4.12 Credit Check Reports

      • BC-4.12.1

        Where a pensioner has been requested to produce a credit report by the Social Insurance Organization (SIO) to establish his/her credit standing, conventional retail bank licensees must not levy any administrative charges.

        Added: October 2015

    • BC-4.13 BC-4.13 Fees and Charges for Services Provided to Individuals

      • BC-4.13.1

        Retail bank licensees must comply with the caps on fees and charges for standard services provided to individuals effective from 1st May 2018 as per the table in Appendix BC-7 in Part B of the CBB Rulebook Volume 1.

        Added: April 2018

      • BC-4.13.2

        Fees and charges on withdrawals done through bank counters for amounts below the ATM withdrawal limits must be waived for all of the following customers:

        (a) Orphans;
        (b) Widows;
        (c) Pensioners;
        (d) Individuals receiving social subsidies from Ministry of Labor and Social Affairs;
        (e) Students; and
        (f) Bahraini nationals with a monthly salary below BD 250.
        Added: January 2019

    • BC-4.14 BC-4.14 Fees and Charges for Services Provided to Companies Under Formation

      • BC-4.14.1

        Retail bank licensees may charge companies under formation a fee capped at BD 10 for the issuance of letter of confirmation of capital maintained with the bank regardless of the capital amount deposited and maintained.

        Added: October 2018

      • BC-4.14.2

        Retail bank licensees must not charge any setup fees for opening bank accounts for companies under formation.

        Added: October 2018

    • BC-4.15 BC-4.15 Interest on Credit Card Transactions

      • BC-4.15.1

        Conventional retail bank licensees must comply with the following requirements with regards to charging interest on credit card statement dues:

        (a) Interest must not be charged if the customer pays the full amount billed and due before or on the due date specified in the monthly credit card statement except for cash withdrawal transactions;
        (b) Interest must not be charged on partial payments made by the customer on or before the due date specified in the monthly credit card statement against credit card amount billed and due;
        (c) Interest on cash withdrawal transactions must be computed from the date of the transaction ("transaction date");
        (d) Interest on credit card amounts billed but unpaid on or before the due date must be computed from the posting date of the transaction; and
        (e) Interest must not be charged on outstanding interest amounts, fees and charges due from the customer.
        Added: July 2019

      • BC-4.15.2

        For the purpose of charging interest on credit card dues, conventional retail bank licensees must only calculate interest charges using 365-days a year basis.

        Added: July 2019

    • BC-4.16 BC-4.16 Interest on Credit Facilities

      • BC-4.16.1

        Conventional retail bank licensees must not charge interest on credit facilities using a 'monthly flat rate'; they must instead use an effective interest rate based on a reducing balance method.

        Added: October 2019

    • BC-4.17 BC-4.17 Blocking Customer Accounts

      • BC-4.17.1

        Conventional retail bank licensees must not block the accounts of a customer (who has a financing arrangement with it) due to customer’s termination from his or her employment or retirement regardless of the bank’s contractual rights to take such action. Banks instead must agree on other arrangements with the customer for the repayment of the financing.

        Added: April 2020

    • BC-4.18 BC-4.18 Fund Transfers by Customers of Payment Service Providers (PSP)

      • BC-4.18.1

        Conventional bank licensees that act as acquirers or payment gateways for PSPs, must not charge more than 100 fils in line with the Electronic Fund Transfer System (EFTS) requirements to the customers of PSPs for normal fund transfers made electronically.

        Added: October 2020

    • BC-4.19 BC-4.19 Merchant Fees on Payments to Zakat and Charity Fund

      • BC-4.19.1

        Conventional bank licensees must exempt the Zakat and Charity Fund (“the Fund”) of the Ministry of Justice, Islamic Affairs and Awqaf from merchant fees for payments made to the Fund.

        Added: April 2021

    • BC-4.20 BC-4.20 Dormant Accounts and Unclaimed Balances

      • BC-4.20.1

        This section sets out the requirements relating to dormant accounts which represents customer accounts including current, call, savings or fixed deposits which turn dormant due to inactivity or no claim or renewal request being made and unclaimed balances relating to various negotiable instruments such as manager cheques, amounts remaining unpaid to customers relating to their investments or amounts remaining unclaimed for other reasons such as cash not dispensed from ATMs etc.

         

        Added: January 2022

      • BC-4.20.2

        Conventional retail bank licensees must establish policies and procedures to deal with dormant accounts and unclaimed balances which must include measures to contact the customer concerned, activation of the accounts where appropriate, return of the moneys to the customer and control measures to prevent frauds and misuse of such accounts.

         

        Added: January 2022

      • Dormant Accounts Treatment

        • BC-4.20.3

          Conventional retail bank licensees must treat customer accounts as dormant accounts in the following cases:

          (a) Current and call accounts, where there have been no transactions initiated by the customer by for a period of 12 months; or
          (b) Saving accounts of any type, where there have been no transactions for a period of 24 months; or
          (c) Fixed deposit accounts where there has been no claim or renewal request for a period of 6 months from the maturity date.

           

          Added: January 2022

        • BC-4.20.4

          For the purpose of Paragraph BC-4.20.3 (b), savings certificates with no expected withdrawals and deposit should not be considered as “dormant” unless the licensee has become aware of non-traceability of the customer and there is evidence for the same.

           

          Added: January 2022

        • BC-4.20.5

          Conventional retail bank licensees must not treat a customer account as dormant if any one or more of the following criteria are met:

          a) The customer has other accounts, of any nature, with the licensee in respect of which there are active transactions initiated by the account holder;
          b) The account is blocked under the requirements of a relevant competent authority; or
          c) The account is subject to litigations or constraints from other regulatory authorities or the customer is deceased.

           

          Added: January 2022

        • BC-4.20.6

          Notwithstanding the requirement under BC-4.20.5, conventional retail bank licensees must notify the customer by mail, e-mail or other communication channel, when any of his accounts becomes inactive.

           

          Added: January 2022

        • BC-4.20.7

          Conventional retail bank licensees must ensure that no withdrawal or transfer or inward clearing cheque is permitted from dormant accounts unless the activation procedures set out in this section are complied with.

          Amended: July 2022
          Added: January 2022

        • BC-4.20.8

          Conventional retail bank licensees must comply with the following additional requirements in transactions relating to dormant accounts:

          (a) Allow electronic and manual transfers to the account;
          (b) Accrue interest in respect of interest-bearing accounts at the prevailing rates depending on the terms of the contract between the bank and the customer;
          (c) Ensure only fees or expenses permitted by CBB is charged, provided, however, that no fee is charged when the account balances become zero;
          (d) Ensure that an account is closed within six months from the date the account becomes dormant and its balance becomes zero following which, a closure notification is sent to the customer by mail, e-mail or other communication channel;
          (e) Make attempts to periodically contact the customer through different communication means and such attempts must be documented;
          (f) Ensure that the movements in dormant accounts are monitored to ensure that such accounts are not being used for money laundering or fraudulent purposes by internal or external parties;
          (g) Licensees must ensure that any movement in dormant accounts is subject to principles of “four-eyes” or “maker and checker” involving at least one authorised signatory of the licensee; and
          (h) Ensure that changes in respect of the dormant accounts, including movement in balances, change of customer contact details, status etc. are subject to internal audit every six months.

           

          Added: January 2022

        • BC-4.20.9

          Conventional retail bank licensees must ensure that the terms and conditions of deposit agreements include provisions relevant to Subparagraphs BC-4.20.8 (a) and (d) above.

           

          Added: January 2022

      • Activation of Dormant Accounts

        • BC-4.20.10

          To activate a dormant account, conventional retail bank licensees must ensure the following:

          (a) The customer provides the licensee with a written or electronic request to activate the account stating the reasons for dormancy of the account;
          (b) The customer submits updated KYC information;
          (c) Activation of the account is subject to principles of “four-eyes” or “maker and checker”/ dual authority checks involving at least one authorised signatory of the licensee; and
          (d) In case of a joint account, the request for activation of the dormant account is signed by the joint accountholders authorised to operate the account unless a valid power of attorney is given.

           

          Added: January 2022

        • BC-4.20.11

          In case of requests for activation of a dormant account through electronic channels using digital signature, the conventional retail bank licensee must check the authenticity of the request and related information, for example, through telephone or video calls, email or other measures to satisfy itself about the authenticity.

           

          Added: January 2022

      • Unclaimed Balances

        • BC-4.20.12

          Conventional retail bank licensees must treat the following balances that remain unpaid due to operational or other reasons as unclaimed balances:

          (a) Unclaimed balances relating to manager cheques, demand drafts, or cashier cheques which have not been presented /claimed during their validity periods;
          (b) Positive credit card balances relating to credit cards not used for a period of 1 year or more;
          (c) Unclaimed cash due to failed ATM/POS or electronic transactions for a period of 1 month or more;
          (d) Dividends that remained unpaid by non-listed conventional retail bank licensees for a period of 1 year or more; and
          (e) Unclaimed balances relating to investments, including undistributed profits and accrued profit/interest for a period of 1 year or more.

           

          Added: January 2022

        • BC-4.20.13

          For purposes of Subparagraph BC-4.20.12 (d), listed companies must follow the guidelines stipulated in Bahrain Bourse Resolution of year 2020, mandating the transfer of unclaimed cash dividends into the Unclaimed Cash Dividends Fund account maintained by Bahrain Clear.

           

          Added: January 2022

        • BC-4.20.14

          Conventional retail bank licensees must make attempts to periodically contact the relevant customers or the rightful parties to return the unclaimed balances through different communication means. The licensee must maintain documentary evidence of such attempts.

           

          Added: January 2022

      • Reporting

        • BC-4.20.15

          Conventional retail bank licensees must report the particulars of dormant accounts and unclaimed balances in the relevant section of the Prudential Information Return ('Form PIR').

           

          Added: January 2022

      • Prohibition of Transfer of Balances

        • BC-4.20.16

          Conventional retail bank licensees must not transfer any of the balances in dormant accounts or unclaimed balances to their income statements.

           

          Added: January 2022

    • BC-4.21 Insurance Cover on Loans

      • BC-4.21.1

        The requirements in this Section apply to conventional retail bank licensees which seek life or other insurance cover in respect of loans to a borrower. These requirements are effective from 1st April 2024, i.e. all credit exposures that mature or are repaid/prepaid in full on or after 1st April 2024 must be subject to the requirements in this Section.

        Added: January 2024

        • BC-4.21.2

          Conventional retail bank licensees using insurance cover as risk mitigant for its loans to individuals must comply with the following requirements:

          (a) Credit policies must specify whether the licensee will bear the cost of insurance cover or if it will recover the cost from the customer;
          (b) If a customer wishes to buy his own insurance cover, the licensee must not refuse to accept assignment of such policy, however, the licensee may require the customer to ensure that the insurance policy terms, duration and features match its requirements;
          (c) If insurance is arranged by the licensee for its customer, the cost recovered from the customer must be the actual cost paid by the licensee to the insurance provider;
          (d) The insurance cost recovered from the customer, in the case of group insurance cover, must not exceed the proportionate aggregate cost payable to the insurance company attributable to the credit facility. Licensees must, on an annual basis, evaluate the insurance costs, which must be based on the actual insurance premiums levied by the insurer for the purpose of determining the insurance cost to be recovered for new facilities. At maturity of loans or at the point of early repayment, the licensee must refund any excess insurance cost amount collected;
          (e) Licensee must not receive any commission, referral fees or any other fees from the insurance provider and/or receive any commission from the borrower;

          (f) Full disclosure with respect to the insurance arrangement (whether individual or group insurance cover), must be made to the customer prior to signing the loan agreement regarding:

          (i) The terms of the insurance coverage and name of the insurance provider;
          (ii) Benefits and exclusions;
          (iii) Need for medical examinations, underlying illnesses not covered and the implications of health conditions on the insurance cost or the insurance claim;
          (iv) Payment method for the insurance cost (i.e. one time upfront payment or addition to loan amount and recovered as part of repayment instalments);
          (v) The insurance premium rate currently applicable and
          (vi) The basis and method of calculation of the insurance cost at the time of granting of the loan;
          (vii) Refund/adjustment of insurance cost in the case of early repayment/ pre-payments and top-ups;

          (g) Customers must be informed in writing if:

          (i) There is a change in the insurance provider in the case of individual insurance cover;
          (ii) There is a possibility of additional costs to be recovered or refunds in case of upfront payments due to changes in insurance premium rates; and
          (iii) Additional insurance costs would be recovered from the customer if loan repayment instalments are not paid on time; and
          (h) The statements of account must clearly show the insurance cost as a separate item where applicable.
          Added: January 2024

        • BC-4.21.3

          If licensees decide to restructure the loan but cannot obtain insurance coverage due to the customer's age or due to a ‘retiree’ status, they must inform the customer in writing about the unavailability of insurance for the extended loan period. In such cases, the licensee must not demand full repayment of loan by the customer due to the customer’s age.

          Added: January 2024

        • BC-4.21.4

          Licensees’ credit policy must specify, at a minimum, the following:

          (a) Disclosures to be made to customers prior to signing of the loan agreement;
          (b) Age limits, if any, that apply for insurance cover as per the licensee’s arrangements with the insurer and the options available to customers not meeting the age limits;
          (c) Measures or implications of default or extension of tenor for any reason, particularly for loans which have an expiry date falling in a higher age bracket at the time of grant of the loan; and
          (d) Any additional terms that apply to customers who fall within the higher age bracket.
          Added: January 2024

        • BC-4.21.5

          Licensees’ credit policy must also specify its approach with regard to lending and the corresponding insurance coverage implications for customers who fall within higher age groups (to be defined by the licensee) and those who have retired from employment or will retire during the tenor of the loan.

          Added: January 2024

        • BC-4.21.6

          For the purposes of BC-4.21.5, extension of loans to individuals who are beyond the retirement age should take into account, in addition to other factors, the increases in life expectancy in Bahrain and the general trend in loss ratios. For this purpose, licensees should agree with their insurer the terms, conditions and procedures in order to meet the needs of individuals above the insurable age of the group loan portfolio and consider measures to be taken in the case of exceptional scenarios such as a customer in the higher age group needing to restructure a facility.

          Added: January 2024

        • BC-4.21.7

          Licensees using group insurance cover must perform a due diligence of the insurance provider at periodic intervals to ensure optimum benefits are obtained for their customers. The due diligence must also involve assessment of various insurance plans and loss ratios.

          Added: January 2024

        • BC-4.21.8

          If the insurance provider is a related party of the licensee, the insurance cost must not be higher than the market quotes for similar insurance cover.

          Added: January 2024