• IC-1.2 IC-1.2 General Requirements

    • ICAAP Framework

      • IC-1.2.1

        Bahraini conventional bank licensees must develop an ICAAP Framework commensurate with the nature, size, complexity and scale of the bank's activities that includes, but is not limited to:

        (a) An appropriate ICAAP policy, procedures and limits for risk management;
        (b) A description of the process and governance arrangements, including the roles and responsibilities for the Board and senior management, with respect to the design and implementation of the ICAAP Framework;
        (c) The bank's risk appetite statement and capital adequacy objectives;
        (d) Comprehensive and timely identification, measurement, mitigation, controlling, monitoring and reporting of risks;
        (e) A process to relate the bank's capital to its risk profile and for allocation of appropriate capital charges for material risks;
        (f) A process to reconcile, where relevant, the historical amounts used to prudential and financial reporting sources; and
        (g) A process of internal controls and independent review.
        July 2018

      • IC-1.2.2

        The ICAAP Framework, and amendments on it, must be submitted to the CBB.

        Amended: January 2022
        Added: July 2018

    • ICAAP Report /Document

      • IC-1.2.3

        Bahraini conventional bank licensees must develop an ICAAP Report and maintain capital levels that are commensurate with their risk profiles and control environments.

        July 2018

      • IC-1.2.4

        The ICAAP Report must be prepared on an annual basis and submitted to the CBB on 31st May of each year.

        July 2018

      • IC-1.2.5

        Bahraini conventional bank licensees must ensure that the outcome of the ICAAP is is forward looking (i.e. considers a minimum of 3-years projections) and not a static capital target. Banks must ensure that the ICAAP covers the following:

        (a) All material risks and potential vulnerability to its business and operational environment;
        (b) Capital requirements, benign and adverse forward-looking environment; and considers capital buffers during benign conditions to help meet any surge in capital demand under adverse conditions;
        (c) A business plan and evaluattion of short-term and long-term capital needs;
        (d) Rigorous stress-testing and scenario analysis that identifies possible events or changes in market conditions that could adversely impact the bank; and
        (e) Results of stress tests and analyses are incorporated, where applicable, into the capital adequacy assessment.
        July 2018