• Chapter One Chapter One Establishment and Administration of the Agency

    • Article 1

      An agency having an independent juristic personality, to be called "The Monetary Agency of Bahrain", shall be established in accordance with the provision of this Law. It shall be referred to in this Law as The Agency". It shall be located in the city of Al-Manama and may open branches in the State of Bahrain and appoint agents and correspondents in this country and abroad.

    • Article 2

      The Agency shall have a special budget to be prepared on the commercial pattern, and the Agency shall, in its relations with others, be considered a merchant. It shall conduct its business and organise its accounts according to commercial banking rules. The operations of the Agency shall not be subject to the provisions of any other law which imposes prior control, except for the audit of the Agency's accounts and assets. No other authority shall in any way intervene in the conduct of the Agency's business, or interfere with its policy.

    • Article 3

      The Objects of the Agency are to

      A — Organize the issue and circulation of the currency of the State of Bahrain as well as the foreign exchange operations.
      B — Maintain the value of the currency of Bahrain and endeavor to ensure monetary stability.
      C — Organize the banking business and control the banking system.
      D — Control and direct bank credit so as to realize the objectives of the economic policy of the State.
      E — Participate in the creation of a developed money and financial market.

    • Article 4

      The administration of the Agency shall, during a transition period not to exceed five years, be assumed by a Board composed of:

      A — The Prime Minister who shall be the Chairman of the Board.
      B — The Minister of Finance who shall be the Deputy Chairman of the Board.
      C — A representative of the Ministry of Finance. .
      D — Three other members.

    • Article 5

      The administration of the Agency shall, after expiration of the transition period referred to in Article (4), be assumed by a Board composed as follows:

      A — A Chairman who shall preside over the meetings of the Board.
      B — A representative of the Ministry of Finance.
      C — Three other members.

    • Article 6

      The representative of the Ministry of Finance and the other three members referred to in respect of the transition period, shall be appointed by Amiri Decree to be issued on the recommendation of the Minister of Finance and the approval of the Council of Ministers. All members of the Board for the permanent period, referred to in Article (5), shall be appointed by Amiri Decree for a period of 3 years which shall be renewable. The decree appointing the members shall determine the amount of their remunerations.

    • Article 7

      The Chairman of the Board referred to in Article (5), as well as the rest of the members referred to in Article (4) and (5) must be Bahraini nationals expert in financial matters. No member of the Board of Directors may be an agent, representative, official, manager, or employee of any financial firm or a holder of more than 10% of the capital of such a firm, nor an agent or representative of any financial or investment interests that are subject to the control of the Agency, nor director, manager or official of any banking firm operating in the State of Bahrain. He must submit to the Board of Directors of the Agency complete statements on all such interests.

    • Article 8

      None of the following may be a member of the Board of Directors of the Agency:

      A — A person previously convicted of a crime affecting honour or honesty.
      B — A person who is declared bankrupt or who has suspended payment.

    • Article 9

      Membership of the Board of Directors of the Agency shall cease to be valid in the following cases:

      A — If a member is convicted of a crime affecting honour or honesty.
      B — If a member is declared bankrupt or as having suspended payment.
      C — If a member loses his legal capacity.
      D — If a member is guilty of serious dereliction of duty or gross maladministration.
      E — If a member fails to attend three consecutive meetings without an excuse acceptable to the Board of Directors.

      Membership of the Board of Directors shall terminate in the manner in which the member was appointed.

    • Article 10

      In case the Chairman or any member of the Board of Directors should die, resign or lose his membership for any other reason, before the expiration of the term for which he had been appointed, a replacement shall be appointed by an Amiri Decree for the unexpired period of his membership.

    • Article 11

      The Board shall meet at least once every two months on the invitation of its Chairman. A meeting of the Board shall be valid only if attend by three of its members including the Chairman, his deputy or the member representing the Ministry of Finance. Resolutions of the Board shall be adopted by the absolute majority vote of the members present, and in case of a tie, the Chairman's vote shall carry.

    • Article 12

      The Board of Directors may seek the assistance of experts and invite to its meetings for consultation any person whose opinion the Board may deem fit to hear on a particular matter.

    • Article 13

      The Agency shall have a Director General who shall be appointed by a decision of the Council of Ministers on the recommendation of the Board of Directors of the Agency and the approval of the Minister of Finance. The decision shall determine the powers, duties and remuneration of the Director General, and in the event of his death or loss of legal capacity a replacement shall be appointed in the same way.

    • Article 14

      The Board of Directors is the authority in control of the affairs of the Agency. It shall, within the limits set by the provisions of this Law, exercise the full powers necessary for the performance of its task. The Board shall in particular:

      A — Set the monetary and credit policy to be followed by the Agency.
      B — Decide on matters related to the issue, circulation and recall of currency.
      C — Fix the interests and commissions to be charged by the Agency for loans, advances and the discount of commercial paper.
      D — Lay down the special regulations required for the application of the provisions of this Law as regards the organisation of the banking business and the exercise of strict control over banks and other financial firms.
      E — Approve the annual Balance Sheet of the Agency and the Profit and Loss Statement.
      F — Issue the regulations pertaining to the staff and employees of the Agency, which regulations shall be subject to approval by the Minister of Finance.
      G — Issue the Financial and Accounting regulations, as well as other regulations required for the enforcement of this law.
      H — Deal with such other matters as may fall within the competence of the Board of Directors under this or any other Law.

    • Article 15

      The Chairman of the Board of Directors shall have the full powers necessary for the administration of the Agency's operations and the issuance of the regulations and instructions pertaining thereto. He is responsible for ensuring the application of this Law and the regulations of the Agency and for implementing the Board of Directors' resolutions. He is the legal representative of the Agency and has the right to sign on its behalf The Chairman may, after securing the approval of the Board of Directors, authorize the Deputy Chairman, the Director General, or other members of the Agency's staff, to exercise some of his powers.

      After the transition period, the Chairman and the Deputy Chairman must devote all their time to their work at the Agency. Neither may, during his tenure of office, occupy any other position, of perform any work other than for the Agency, whether paid or unpaid, nor shall he participate in any contracts concluded by the government or public authorities, nor concomitantly be a director of any private company or firm without the prior approval of the Minister.

      The Chairman and the Deputy Chairman may participate in the activities of Committees, institutions and organisations or Authorities, as well as in the activities of international congresses.

    • Article 16

      It is prohibited for members of the Agency's Board of Directors, for its staff and employees, and for its auditors and agents, to divulge such data or information relating to the Agency or its customers, or to the affairs, of the banking firms that are subject to the Agency's control, as may have come to their knowledge by reason of the performance of their duties.

      As an exception, the above prohibition shall not apply to cases required by the performance of their duties or the discharge of the responsibilities of their office, as well as to cases where they act on an order issued by a competent Court of Law and to cases where Law allows them to divulge such data or information. Without prejudice to any severe penalty prescribed in any other law, anyone who violates the prohibition set forth in the preceding paragraph shall be punished by imprisonment for a term not exceeding six months and/or a fine not exceeding 1000 (one thousand) dinars.