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  • Initial Approval Requirement for Major Investments

    • CM-5.10.3

      All Bahraini conventional bank licensees must obtain the CBB's prior written approval before making a "major investment" (as described in CM-5.5.1E) in another commercial entity (whether incorporated inside or outside of Bahrain). [This Paragraph was moved to CM-5.10.3A, CM-5.10.3B, CM-5.10.3C and CM-5.10.3D in October 2016].

      Amended: October 2016
      Amended: April 2015
      Amended: January 2015
      Amended: April 2014
      Amended: July 2012
      Amended: January 2012
      Added: January 2011

    • CM-5.10.3A

      All Bahraini Conventional bank licensees must obtain the CBB's prior written approval before any future increases in the bank's ownership of any of the existing major investments in excess of 5% of such exposure.

      Added: October 2016

    • CM-5.10.3B

      Where the percentage ownership increase is due to revaluation or change in the capital of the bank, the bank must provide a written notification to the CBB, outlining the percentage increase and the reason for such increase.

      Added: October 2016

    • CM-5.10.3C

      Where a percentage ownership increase as described in Paragraph CM-5.10.3B occurs, the 800% risk weight rule will apply as it exceeds the single large exposure limit outlined in Section CM-5.5.

      Added: October 2016

    • CM-5.10.3D

      Any bank wishing to acquire a "major investment" in another entity must address the points outlined in Paragraph CM-5.10.10 of this Section so that the CBB may make an informed review of the request. Banks must submit such request to the CBB and the CBB shall respond within 2 weeks from the date of receiving a complete set of all the required documents.

      Added: October 2016

    • CM-5.10.4

      Any major investment by a Bahraini conventional bank licensee in the capital instruments of another entity must be included in the measure of an "exposure" for the purposes of Module CM, i.e. such major investments must be aggregated with all other facilities to a client for the purpose of calculating the level of "large exposures".

      Amended: October 2016
      Amended: January 2015
      Amended: April 2014
      Added: January 2011

    • CM-5.10.5

      The CBB reserves the right to require Bahraini conventional bank licensees to dispose of any major investments acquired without its prior approval. Where a "major investment" is acquired without approval of the CBB, then the entire value of the holding must be deducted from the consolidated Total Capital of the concerned bank. Approval will not be given for "major investments" in entities incorporated in jurisdictions where secrecy constraints exist or there are restrictions on the passage of information to the bank (other than customer confidentiality requirements imposed by financial regulators).

      Amended: October 2016
      Amended: January 2015
      Amended: April 2014
      Added: January 2011