• Chapter Seven Chapter Seven Relations of the Agency with the Government

    • Article 42

      (a) The Agency shall be the Bank of the Government, shall act as its financial agent, and shall be the agency where Government Funds are to be deposited. The Agency may, with the prior approval of the Minister of Finance, render the same services to Government organizations, Government agencies and public authorities.
      (b) As an exception to the provisions of the preceding paragraph, the Government may open and maintain accounts with other banking firms and, in general, utilize the services of such banking firms in such cases, for such periods and under such terms and conditions as shall be agreed upon between the Minister of Finance and the Agency.
      (c) The Agency shall receive and disburse government funds, and shall keep the relative accounts, without collecting any charge for such services. The Agency shall not pay any interest on the credit balances of the Government.
      (d) The Agency shall assume the administration of the National Debt and shall make the agreements for its issue, shall pay the relative interests and redeem bonds, warrants, notes and other debentures of the Government, of its organizations and agencies, or of public authorities guaranteed by the Government.
      (e) The Government may, through the Minister of Finance, ask the Agency to express an opinion and prepare reports on matters relating to the objects of the Agency.
      (f) The Agency must submit to the Government, through the Minister of Finance, a report on events affecting the monetary and financial situation, their causes, results and suggested remedial action, as well as on any matter that, in the opinion of the Agency, may affect the Agency's efforts to realize its objects.

    • Article 43

      The Agency, as agent for the Government, shall enforce any exchange control law and, in this capacity, shall have the power to examine and approve applications, to grant permits and exemptions therefrom, and to take such other actions as it may be delegated by the Minister of Finance to take in accordance with the provisions of the law.

    • Article 44

      (a) The Agency may advance loans to cover any seasonal deficit in the national budget, provided such loans shall be payable within the three months immediately following the end of the fiscal year during which the loans ware granted, and provided also that such loans shall not exceed 10% of the budget revenues for the preceding year. Such loans shall bear interest at such rate as shall be determined by the Agency's Board of Directors. Similar loans may, with the prior approval of the Minister of Finance, be granted to Government organizations, Government agencies and public authorities.
      (b) Without prejudice to the provisions of the preceding paragraph, the Agency shall have the right to advance to the Government, upon terms and conditions to be agreed upon, such loans as are necessary to pay the subscriptions and make other payments resulting from, or necessary for, the State of Bahrain's membership in any international financial institution, for the State of Bahrain's contribution to any account as a result of such membership, or for the execution of any related transactions or operations.

    • Article 45

      The Agency may purchase, sell and deal in bonds, warrants, notes and other debentures issued by the Government, or those issued by Government organizations or agencies or by public authorities under the guarantee of the Government, provided that such bonds were offered for sale to the public and were part of a publicly-offered issue at the time of their acquisition by the Agency.

    • Article 46

      (a) Except for the cases mentioned in this Article and in Articles (33), (40), (44) and (45), the Agency shall not directly or indirectly grant loans or hold bonds, warrants or other debentures issued or guaranteed by the Government, its organizations or agencies, or by public authorities, provided however that the implementation of the provisions of this Article shall not prevent the Agency from acquiring notes under the provisions of Article (17) paragraph (b) and Article (32) paragraph (a) nor from advancing loans pursuant to Article (44) paragraph (b).
      (b) Except for the loans allowed under paragraph (a) above, the value of the loans advanced by the Agency to the Government and the value of any bonds, warrants, notes and other debentures issued by the Government and its agencies or by public authorities with the guarantee of the Government, that are held by the Agency, shall at no time in the aggregate exceed 25% of the annual average of the ordinary revenues of the Government, except in the case provided for in paragraph (e) of this Article.
      (c) In the implementation of paragraph (b), the ordinary revenue of the Government shall consist of revenues from faxes, real property assessments, royalties, fees, charges, rentals, profit and income derived from any Government investment or operation, any transfer to the Government revenues made by Government organizations and agencies or by public authorities. These revenues shall not, however, include the proceeds of any loans, donations or other forms of economic assistance. The annual average of ordinary revenues shall mean the average of ordinary revenues during the preceding three years for which accounts exist.
      (d) In case the Agency's Board of Directors decides:-
      1 - that the limits set in paragraph (b) risk to be exceeded
      or
      2 - that exceeding the limits set in paragraph (b) involves a risk,
      the Agency must submit to the Minister of Finance a detailed report on the situation and the appropriate remedial measures it recommends. The Agency must also continue to submit periodic reports and recommendations at intervals not exceeding six months until such time as, in its opinion, the situation shall have been corrected.
      (e) If indebtedness reaches the limit referred to in paragraph (b), the Agency shall so notify the Minister of Finance and shall not directly or indirectly allow any increase in its loans to the Government or in Government loans already in its possession. However, the Prime Minister may require the Agency to allow a temporary increase in the limit of indebtedness upon such terms and conditions as the Government shall set, and for a period not exceeding six months. The Prime Minister shall notify the Agency that the Government shall assume the responsibility of implementing the policy it has set, whereupon the Agency must implement such policy as long as the order remains in effect.

    • Article 47

      In accordance with a decision of the Minister of Finance, the Agency shall be the financial agent, custodian and agency through which all operations shall be transacted with the international financial institutions of which the State of Bahrain is member.

    • Article 48

      The Agency is exempt from all Government taxes, local rates and stamp duties on its documents, profits, operations, capital and property.

    • Article 49

      The Agency shall be liquidated only by a law that shall determine the liquidation formalities and time limits.