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  • EN-6 EN-6 Financial Penalties

    • EN-6.1 EN-6.1 CBB Policy

      • EN-6.1.1

        Under Chapter 2 "Procedures to be taken before penalties or administrative proceedings are applied" and Chapter 3 "Penalties and administrative proceedings" of Part 9 of the CBB Law, the CBB may impose financial penalties on licensees or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law and its amendments (in particular Article 129). The CBB shall use judgement and will take into account relevant facts in determining the need to impose financial penalties. Financial penalties are thus normally preceded by the issuance of a written formal notice and/or Direction.

        Amended: July 2018
        Amended: April 2016
        Amended: October 2010
        Added: October 2007

      • EN-6.1.2

        The level of financial penalty applied is determined by the nature of the contravention and the amount of additional supervisory attention and resources taken up by a licensee's or persons' referred to in paragraph (b) of Article (68 bis 1) of the CBB Law behaviour and by limits set in the CBB Law. The CBB will apply the methodology set out in Appendix A to determine the size of the penalty. The CBB intends that the impact of a penalty should derive more from its signaling effect than from the actual amount of money involved.

        Amended: July 2018
        Amended: April 2016
        Amended: October 2010
        Added: October 2007

      • EN-6.1.2A

        In accordance with Article 129 of the amendment to the CBB Law, the maximum financial penalty levied for failing to comply with CBB Law, Regulations, Directives and other requirements is BD 100,000 per violation. The CBB may opt to limit the amount of the financial penalty and use other enforcement measures as outlined in this Module, such as imposing restrictions on a conventional bank licensee limiting the scope of operations.

        Added: July 2018

      • EN-6.1.3

        As indicated in Paragraph EN-1.3.3, the CBB requires disclosure by Bahraini conventional bank licensees in their annual report of any financial penalties served on them, together with a factual description of the reasons given by the CBB for applying the penalty. In addition, the CBB may publicise the issuance of a financial penalty notice, where there is a strong case that doing so would help achieve the CBB's supervisory objectives, as mentioned in Article 132 of the pre-mentioned Law.

        Amended: October 2019
        Amended: October 2010
        Added: October 2007

      • EN-6.1.3A

        As indicated in Paragraph EN-1.3.3, the CBB requires disclosure by branches of foreign bank licensees in their annual audited financial statements of any financial penalties served on them, together with a factual description of the reasons given by the Central Bank for applying the penalty. In addition, the CBB may publicise the issuance of a financial penalty notice, where there is a strong case that doing so would help achieve the CBB's supervisory objectives, as mentioned in Article 132 of the pre-mentioned Law.

        Added: October 2019

      • EN-6.1.4

        Examples of the types of compliance failings that may lead to the serving of a financial penalty notice are outlined in Part 11 of the CBB Law and may include (but are not limited to):

        (a) Failures to address persistent delays and/or significant inaccuracies in regulatory reporting to the CBB;
        (b) Repeated failures to respond to formal requests for information from the CBB, within the deadlines set;
        (c) The submission of information to the CBB known to be false or misleading; and
        (d) Major failures in maintaining adequate systems and controls in accordance with the CBB's requirements, subjecting depositors and other customers to significant risk of financial loss.
        Amended: October 2010
        Added: October 2007

      • EN-6.1.5

        In assessing whether to serve a financial written penalty notice, the CBB takes into account the following criteria:

        (a) the seriousness of the contravention, in relation to the requirement(s) concerned;
        (b) the duration and/or frequency of the contravention, and the extent to which it reflects more widespread weaknesses in controls and/or management; the extent to which the contravention was deliberate or reckless;
        (c) the licensee's past compliance record and conduct following the contravention; and
        (d) the scope of any other action taken by the CBB or other regulators against the licensee, in response to the compliance failures in question.
        Additional criteria are set out in Appendix A.
        Amended: July 2018
        Amended: October 2010
        Added: October 2007

      • EN-6.1.6

        The imposition of a financial penalty does not preclude the CBB from also using other enforcement measures to remedy the same violation (for instance, a Direction).

        Added: October 2007

      • EN-6.1.7

        A written notice of a financial penalty must be issued before imposing any financial penalty. The written notice must contain the following information:

        (a) The violations committed by the licensee with respect to CBB Law; or the prudential Rulebook; or any Directions, warnings or formal requests for information; or violations of the terms and conditions of the license issued to the licensee;
        (b) Evidence or proof to support the above;
        (c) The level of financial penalty to be imposed; and
        (d) The grace period to be allowed to the licensee for challenging the intended penalty (which will not be less than 30 days).
        Amended: October 2010
        Added: October 2007

      • EN-6.1.8

        The licensee may either pay the penalty or object within the above period. The CBB will consider any objection and make a formal resolution within 30 days of receiving the objection. Thereafter, the formal resolution and any accompanying penalties are final and must be paid within 30 days.

        Amended: October 2010
        Added: October 2007

    • EN-6.2 EN-6.2 Module FC (Financial Crime)

      • EN-6.2.1

        [This Paragraph was deleted in July 2018].

        Deleted: July 2018

      • EN-6.2.2

        [This Paragraph was deleted in July 2018].

        Deleted: July 2018

      • EN-6.2.3

        [This Paragraph was deleted in July 2018].

        Deleted: July 2018

      • EN-6.2.4

        Any financial penalties applied by the CBB as regards the implementation of its requirements set out under Module FC, are without prejudice to the criminal sanctions available to the Bahraini courts under the Decree – Law No. 4 of 2001, with respect to the prevention and prohibition of the laundering of money. As with other financial penalties, the imposition of a financial penalty with regards to breaches of the requirements in Module FC does not prevent the CBB from also using other enforcement measures to remedy the same violation (for instance, a Direction).

        Amended: October 2010
        Added: October 2007

    • EN-6.2A EN-6.2A Financial Penalties for Date Sensitive Requirements

      • EN-6.2A.1

        Modules LR, FC, BR, HC and PD contain specific requirements where conventional bank licensees must comply with, by a precise date. Where a specific due date is involved, the CBB's financial penalties are based on a per diem basis.

        Amended: July 2017
        Added: October 2010

      • EN-6.2A.2

        This Section applies to date sensitive requirements for:

        (a) Reporting requirements included in Module BR;
        (b) Public disclosure requirements included in Module PD;
        (c) The report of the external auditor or a consultancy firm approved by the CBB required as per Paragraph FC-4.3.1B (d);
        (d) Annual licensing fees required as per Section LR-4.2, and
        (e) Conduct of Shareholders' Meetings requirements included in Section HC-7.2.
        Amended: July 2017
        Amended: October 2013
        Added: October 2010

      • EN-6.2A.3

        Financial penalties related to late filing or other date sensitive requirements are calculated as per the following per diem basis:

        (a) Where the conventional bank licensee's total consolidated assets are less than or equal to BD 50 million, the financial penalty for late filing is BD 100 per day;
        (b) Where the conventional bank licensee's total consolidated assets are greater than BD 50 million but less than BD 250 million, the financial penalty for late filing is BD 200 per day;
        (c) Where the conventional bank licensee's total consolidated assets are greater than BD 250 million but less than or equal to BD 5 billion, the financial penalty is BD 400 per day;
        (d) Where the conventional bank licensee's total consolidated assets are greater than BD 5 billion, the financial penalty is BD 800 per day; and
        (e) For new licensees who have yet to provide audited financial statements, the financial penalty is BD 100 per day.
        Amended: April 2017
        Added: October 2010

      • EN-6.2A.4

        For branches of foreign bank licensees, only those assets reported as part of the filing for their Bahraini operations, shall be considered in determining the per diem financial penalty.

        Amended: April 2020
        Added: October 2010

      • EN-6.2A.5

        [This Paragraph was deleted in July 2018].

        Deleted: July 2018

      • EN-6.2A.6

        The various deadlines for submission of reports and annual fees referred to in Modules BR, FC, PD and LR are defined:

        (a) In terms of a specified number of days or months following a given date, such as the last date of a calendar quarter;
        (b) A specified number of days or months after the occurrence of a specific event; or
        (c) A specific date.
        Amended: April 2011
        Added: October 2010

      • EN-6.2A.7

        In imposing financial penalties for date sensitive requirements, the following criteria apply:

        (a) Where the due date falls on a weekend or a holiday as designated by the CBB, the first business day following the weekend or holiday will be considered as being the due date;
        (b) Where a due date is not complied with by the end of the day on which it is due, holidays and weekend days are included in the number of days the item is considered late;
        (c) For returns and other filings, the date received is the date recorded by the CBB's systems in case of returns filed electronically;
        (d) In the case of returns filed in hard copy, the CBB stamp is the date received;
        (e) All returns are to be sent to the respective Supervision Directorate and the annual fees to the Accounts Directorate, on or before the due date, to be considered filed on time;
        (f) A day ends at midnight in the case of returns that must be filed electronically, or at the close of CBB business day, in the case returns are filed in hard copy; and
        (g) An incomplete return, where completeness is determined in relation to the requirements of the relevant instructions and Module BR, is considered 'not filed' until the CBB receives all necessary elements of the return.
        Amended: July 2011
        Amended: April 2011
        Added: October 2010

      • EN-6.2A.8

        The CBB does not require any particular method of delivery for returns and filings that are filed in hard copy. The use of the Bahrain postal services, private courier services or other methods of delivery is entirely at the discretion and risk of the licensee. For the payment of annual fees, licensees must follow the requirements of Form ALF, included under Part B of Volume 1.

        Amended: April 2011
        Added: October 2010

      • EN-6.2A.9

        A decision to impose a financial penalty for date sensitive requirements is unrelated to whether the CBB issues a reminder; it is the licensee's responsibility to file and disclose on time as per the requirements of Volume 1 (Conventional Banks) Rulebook.

        Amended: April 2011
        Added: October 2010

    • EN-6.2B EN-6.2B [This Section was moved to EN-6.5 in October 2022]

      • EN-6.2B.1

        [This Paragraph was moved to EN-6.5.1].

        Amended: October 2022
        Added: April 2021

    • EN-6.3 EN-6.3 Procedures for Financial Penalties

      • EN-6.3.1

        A written financial penalty notice will be addressed to the Chief Executive Officer or General Manager of the licensee or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law concerned. This written notification will describe the contravention concerned, the CBB's evidence supporting a financial penalty, and the factors justifying the level of penalty proposed. Only an Executive Director or more senior member of the CBB's management may sign the notification.

        Amended: April 2016
        Amended: October 2010
        Added: October 2007

      • EN-6.3.2

        The licensee or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law has 30 days from the notification's date of issuance to submit any objections it wishes to make to the CBB, in writing and addressed to the issuer of the original notification. If the licensee or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law decides not to submit objections, it has 30 calendar days from the notification's date of issuance in which to pay the penalty.

        Amended: April 2016
        Amended: October 2010
        Added: October 2007

      • EN-6.3.3

        Should the licensee or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law make representations challenging the proposed penalty, the CBB has 30 days from the issuance of those representations in which to re-examine the facts of the case and its conclusions. If the CBB confirms application of a penalty, payment is required within 30 calendar days of a final notice being issued.

        Amended: April 2016
        Amended: October 2010
        Added: October 2007

      • EN-6.3.4

        Failure to pay penalties within the required deadlines will be considered a breach of the CBB's regulatory requirements, and will also result in other measures being considered, as described elsewhere in this Module.

        Amended: July 2018
        Amended: October 2010
        Added: October 2007

      • EN-6.3.5

        In instances where a bank anticipates that it will be unable to meet any date sensitive requirements prescribed by the Rulebook, it must provide a written notification to the CBB at least one week prior to the prescribed due date outlining the date sensitive requirements which it will be unable to comply with, along with a well justified reason for the non-compliance.

        Added: April 2016

    • EN-6.4 EN-6.4 Remedying a Compliance Failure

      • EN-6.4.1

        Payment of a financial penalty does not by itself absolve a licensee or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law from remedying the compliance failure concerned. The CBB will expect the licensee or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law to address the contravention within a reasonable timescale, to be agreed on a case-by-case basis. Failure to do so will result in other measures being considered.

        Amended: April 2016
        Amended: October 2010
        Added: October 2007

    • EN-6.5 Other Financial Penalties

      • Financial Penalties for Non-compliance with Blocking / UnBlocking Requirements

        • EN-6.5.1

          The financial penalty for late execution of blocking/unblocking orders issued by the Court/Public Prosecution is BD 100 per day per customer account. Such financial penalties will be deducted directly from the conventional bank licensee’s clearing account at the CBB or charged through billing on a weekly basis.

          Added: October 2022

      • ATM Physical Security Measures

        • EN-6.5.2

          The financial penalty for non-compliance with the ATM physical security measures stipulated in Module OM is BD 5,000 on each violation.

          Added: October 2022