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  • CA-A CA-A Introduction

    • CA-A.1 CA-A.1 Application

      • CA-A.1.1

        Regulations in this Module are applicable to locally incorporated banks on both a stand-alone basis (i.e. including their foreign branches), and on a consolidated group basis (i.e. including their subsidiaries and any other investments which are included or consolidated into the group accounts or are required to be consolidated for regulatory purposes by the CBB).

        October 07

      • CA-A.1.2

        In addition to licensees mentioned in Paragraph CA-A.1.1, certain of these regulations (in particular gearing and market risk requirements) are also applicable to Bahrain branches of foreign retail bank licensees.

        October 07

    • CA-A.2 CA-A.2 Purpose

      • Executive Summary

        • CA-A.2.1

          The purpose of this Module is to set out the Central Bank's capital adequacy regulations and provide guidance on the calculation of capital requirements by locally incorporated banks. This requirement is supported by Article 44(c) of the Central Bank of Bahrain and Financial Institutions Law (Decree No. 64 of 2006).

          October 07

        • CA-A.2.2

          Principle 9 of the Principles of Business requires that conventional bank licensees maintain adequate human, financial and other resources, sufficient to run their business in an orderly manner (see Section PB-1.9). In addition, Condition 5 of CBB's Licensing Conditions (Section LR-2.5) requires conventional bank licensees to maintain financial resources in excess of the minimum requirements specified in Module CA (Capital Adequacy).

          October 07

        • CA-A.2.3

          The Module also sets out the minimum gearing requirements which relevant banks (referred to in Section CA-A.1) must meet as a condition of their licensing.

          October 07

        • CA-A.2.4

          The requirements specified in this Module vary according to the Category of conventional bank licensee concerned, their inherent risk profile, and the volume and type of business undertaken. The purpose of such requirements is to ensure that conventional bank licensees hold sufficient capital to provide some protection against unexpected losses, and otherwise allow conventional banks to effect an orderly wind-down of their operations, without loss to their depositors. The minimum capital requirements specified here may not be sufficient to absorb all unexpected losses.

          October 07

        • CA-A.2.5

          The Central Bank requires in particular that the relevant banks maintain adequate capital, in accordance with the requirements of this Module, against their risks.

          October 07

      • Legal Basis

        • CA-A.2.6

          This Module contains the CBB's Directive relating to the capital adequacy of conventional bank licensees, and is issued under the powers available to the CBB under Article 38 of the CBB Law. The Directive in this Module is applicable to all conventional bank licensees.

          October 07

        • CA-A.2.7

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

          October 07

    • CA-A.3 CA-A.3 Module History

      • CA-A.3.1

        This Module was first issued in July 2004 as part of the conventional principles volume. All requirements in this volume have been effective since this date. Any material changes that have subsequently been made to this Module are annotated with the calendar quarter date in which the change was made: Chapter UG 3 provides further details on Rulebook maintenance and version control. The most recent changes made to this Module are detailed in the table below:

        Summary of changes

        Module Ref. Change Date Description of Changes
        CA-A.2 10/07 Change categorising Module as a Directive
        October 07

      • Evolution of the Module

        • CA-A.3.2

          Prior to the development of the Rulebook, the Central Bank had issued various circulars representing regulations relating to capital adequacy requirements. These circulars were consolidated into this Module. These circulars are listed below:

          Circular Ref. Date of Issue Module Ref. Circular Subject
          ODG/50/98 11 Sep 1998 CA-1 - CA-9 Market Risk Capital Regulations
          BC/07/02 26 Jun 2002 CA-1.4 Review of PIR by External Auditors
          OG/78/01 20 Feb 2001 CA-2.5 Monitoring of Capital Adequacy
          BC/01/98 10 Jan 1998 CA-2.5 Risk Asset Ratio
          October 07

      • Effective date

        • CA-A.3.3

          The contents in this Module are effective from the date depicted in the original circulars (see Paragraph CA-A.3.2) from which the requirements are compiled or from the dates mentioned in the Summary of Changes.

          October 07