CM-A.2 CM-A.2 Key Requirements
CM-A.2.1
Overseas conventional bank licensees are expected to maintain provisions against potential loan losses on their books in Bahrain. Head offices of banks that do not wish to maintain provisions on books of theirbranch (es) in Bahrain must advise the CBB, on an annual basis and in writing, of the amount of provisions set aside for the bad debts of Bahrainbranch (es) (see Section CM-4.3).Amended: April 2014
Amended: July 2011
Amended: January 2011
October 2007CM-A.2.2
The CBB requires all
Bahraini conventional bank licensees to set out their policy on largeexposures , including limits for differing types ofexposures to individual customers, banks, corporates, countries and economic and market sectors, in a policy statement which must be formally approved by the Board of Directors (see Section CM-5.8).Amended: April 2014
Amended: July 2011
Amended: January 2011
October 2007CM-A.2.2A
The CBB requires that any large
exposure , as defined in Paragraph CM-5.5.1, must be priorly approved by the bank's Board of Directors (see Paragraph CM-5.5.3A).Added: January 2017CM-A.2.3
The aggregate of large
exposures may not exceed 800% of the bank's consolidated Total Capital (see Paragraph CM-5.5.3). A bank may not incur anexposure to an individualcounterparty or group of closely relatedcounterparties which exceeds 15% of the reporting bank's consolidated Total Capital (see Paragraph CM-5.5.4).Amended: January 2015
Amended: April 2014
October 2007CM-A.2.4
Exposures to all connectedcounterparties when taken together, may not exceed 25% of consolidated Total Capital.Controllers andsubsidiaries ofcontrollers are not allowed to borrow from the bank (i.e. a 0% limit), however smaller shareholders will be subject to a 15% limit on an individual basis (see Paragraph CM-5.5.4). Directors who are alsocontrollers with significant ownership are subject to the 0% limit (see Paragraphs CM-5.5.11 and CM-5.5.12).Amended: January 2015
Amended: April 2014
Amended: April 2011
October 2007CM-A.2.5
All
Bahraini conventional bank licensees are required to report (for the attention of the Director of Banking Supervision Directorate) all largeexposures , (whether exempt or not) on a quarterly basis using the Form PIR provided in Appendix BR-5 (see Section CM-5.7).Amended: April 2014
Amended: January 2010
Amended: October 2009
October 2007CM-A.2.6
The CBB's prior written consent must be obtained for any loan to an employee where the amount of such loan, either singly or when added to an existing loan(s) outstanding to that employee at that date, would be equal to or in excess of BD 100,000 (or its equivalent) (see Section CM-6.1).
Amended: April 2014
Amended: July 2011
Amended: January 2011
October 2007CM-A.2.7
The CBB requires that banks only provide a new consumer facility (or renew, extend or otherwise modify an existing consumer facility) for an amount such that the borrower's total monthly repayments on all his consumer finance commitments do not exceed 50% of his monthly gross income (see Section CM-8.4).
Amended: April 2014
Amended: July 2011
October 2007CM-A.2.8
[This Paragraph was deleted in April 2014 as this requirement has been moved to Module BC].
Deleted: April 2014
Amended: July 2012
October 07CM-A.2.9
The CBB's prior written consent must be obtained before writing off any loan to a senior employee/officer/Director of the reporting bank or other bank(s) who fails to discharge his/her repayment obligations to the reporting bank (see Section CM-7.1 for details).
Amended: July 2011
Amended: January 2011
October 2007CM-A.2.10
All
Bahraini conventional bank licensees must notify the CBB of any write-off of a credit facility, (i.e., loan, overdraft and any other credit facility) of an amount in excess of BD 100,000 (or its equivalent). Chapter CM-7 contains Rules relating to the write-off of credit facilities.Amended: April 2014
Amended: January 2013
Amended: July 2011
Amended: January 2011
October 2007CM-A.2.11
All banks which provide credit to resident natural persons in Bahrain must become members of the Credit Reference Bureau and follow the CRB Code of Practice (see Paragraph CM-1.2.4).
Amended: April 2014
October 07CM-A.2.12
All banks are required to follow the CBB's requirements concerning refund of insurance on loan prepayments and top-ups and early repayment fees/charges as outlined in Section CM-8.6.
Added: April 2008CM-A.2.13