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  • CP-A CP-A Introduction

    • CP-A.1 CP-A.1 Purpose

      • Executive Summary

      • CP-A.1.1

        The purpose of this Module is to set out rules and regulations establishing a Deposit Protection Scheme (the 'Scheme') for compensating eligible depositors (as defined under Section CP-2.1) when the banks (referred to under Section CP-2.1) are unable, or likely to be unable, to satisfy claims against them.

        October 07

      • CP-A.1.2

        The body established to operate and administer the compensation scheme is the Deposit Protection Board (the 'Board'). The Module sets out rules and regulations that would allow the Board to:

        (a) Administer and implement the scheme;
        (b) Calculate compensation amount; and
        (c) Establish rules of operation.
        October 07

      • CP-A.1.3

        The Module also specifies:

        (a) Who is eligible for receiving compensation;
        (b) How the scheme will be funded;
        (c) Who the contributing banks are; and
        (d) What are contributing banks' responsibilities regarding the implementation of the scheme.
        October 07

      • Legal Basis

        • CP-A.1.4

          This Module sets out how the CBB now applies Resolution No. 3 of His Highness the Prime Minister dated 1st November 1993 (the "Resolution") in light of certain legislative and regulatory changes that have taken place since that date. It also contains a modified version of a Regulation issued by the Bahrain Monetary Agency by way of circular (OG/423/93) on 28th November 1993 (the "Regulation") in order to implement the Resolution. The Regulation (as modified) is currently effective by virtue of Article 188 (and Article 4) of the Central Bank of Bahrain and Financial Institutions Law 2006 ("CBB Law"). The Regulation is applicable to all conventional bank licensees.

          Adopted: January 2011

        • CP-A.1.5

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

          Adopted: January 2011

    • CP-A.2 CP-A.2 Key Requirements

      • CP-A.2.1

        The Deposit Protection Board (the 'Board') should, subject to and in accordance with the terms and conditions of this Module, be responsible for the activities set out under Section CP-1.1.

        Amended: January 2011
        October 07

      • CP-A.2.2

        The Board should be convened and ready to carry out its duties in the case of any of the following events identified under Section CP-1.2.

        October 07

      • CP-A.2.3

        The Scheme will apply to eligible deposits (as defined in Section CP-2.1) held with the Bahrain offices of retail banks which are licensed by the CBB.

        Amended: January 2011
        October 07

      • CP-A.2.4

        Each eligible depositor should be entitled to receive under the Scheme a maximum of the lesser of:

        (a) Three quarters of the combined total amount of all of his eligible deposits with the relevant bank; or
        (b) BD 15,000.
        Amended: January 2011
        October 07

      • CP-A.2.5

        Notwithstanding the provisions of Section CP-2.2, the amount payable under the Scheme in any one calendar year (the 'current year') should not exceed BD 25,000,000.

        October 07

      • CP-A.2.6

        Upon the convening of the Board in accordance with Section CP-1.2, the Board will calculate the total amount of compensation to be paid under the Scheme in the case of the relevant bank, as well as the amount of compensation payable under the Scheme to each eligible depositor of such relevant bank.

        October 07

      • CP-A.2.7

        Upon receipt by the Board of confirmation from the (lead) mandated bank that the actions referred to in Section CP-2.3 have been completed, each eligible depositor should be sent a certificate in duplicate (attached in Appendix CP-1) by the Board informing such eligible depositor of the amount of compensation payable to him/her under the Scheme in respect of his/her eligible deposit(s) with the relevant bank.

        October 07

      • CP-A.2.8

        The CBB requires all retail bank licensees 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 statement set out under Section CP-2.4.

        Amended: January 2011
        October 07

    • CP-A.3 CP-A.3 Module History

      • CP-A.3.1

        This Module was first issued in July 2004 as part of the conventional principles volume. 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 3 of Module UG provides further details on Rulebook maintenance and control.

        Amended: January 2011

      • CP-A.3.2

        A list of the most recent changes made to this Module are detailed in the table below:

        Summary of Changes

        Module Ref. Change Date Description of Changes
        CP-1.2 10/07 New reference to CBB Law
        CP-2.4 10/07 Renaming of Scheme Disclosure to "CBB"
        CP-2.1 04/10 Reference to the Prime Ministerial Resolution No. (3) of 1993 concerning the 'Deposit Protection Scheme'
        CP 01/2011 Various minor amendments to ensure consistency in formatting of CBB Rulebook.
        CP-A.1.4 and A.1.5 01/2011 Added legal basis.
        Amended: January 2011

      • Evolution of the Module

        • CP-A.3.3

          Prior to the development of the Rulebook, the CBB had issued various circulars representing regulations covering the operations and establishment of the Deposit Protection Scheme and the Deposit Protection Board. These circulars have now been consolidated into the Compensation Module. These circulars and their evolution into this Module are listed below:

          Circular Ref. Date of Issue Module Ref. Circular Subject
          OG/423/93 28 Nov 1993 CP-1 – CP-2 Deposit Protection Scheme (the "Scheme")
          OG/425/94 21 Dec 1994 CP-2.4 Deposit Protection
          Amended: January 2011
          October 07

      • Effective Date

        • CP-A.3.4

          The contents in this Module are effective from the date depicted in the original circulars/information pack (see Paragraph CP-A.3.3) from which the requirements are compiled.

          Amended: January 2011
          October 07