• Chapter Ten Chapter Ten Operating Licenses for Banking Firms

    • Article 56

      Any company, firm, agent or representative who wishes to practice the banking profession in the State of Bahrain must file with the Agency an application to this effect. The Agency may accept the application and grant the license to practice the banking profession, or refuse to grant the license, stating the reasons on which its refusal was based.

      The Agency's acceptance to grant the license shall be subject to the approval of the Ministry of Finance. The license may not be granted to any person to operate as a banking firm — with the exception of foreign banking firms — unless such person has taken the form of a corporation organized in accordance with the provisions of the laws of the State of Bahrain.

    • Article 57

      Persons who, on the date of enforcement of the provisions of this Chapter, were authorized by the Ministry of Finance to engage in banking operations or to act as agents or representatives of foreign financial or investment interest, shall be considered, as of that date and for the subsequent twelve months, to be licensed to engage in such operations. However, in case such firms, agents or representatives wish to continue to perform these operations after the expiration of the twelve months period, each must, in the course of the period referred to above, file with the Agency an application for a license to do so. If the Agency is satisfied that the application fulfils all the conditions laid down in this Law, it shall grant him the license to continue to perform these operations.

    • Article 58

      The Agency shall determine the particulars to be included in the application for a license, as well as the documents to be attached to the application.

    • Article 59

      The Agency may, upon granting the license, impose such terms and conditions as it may deem necessary for the proper practice of this activity, and without prejudice to the aforementioned general rule, foreign banking firms must, before being permitted to begin operating in the State of Bahrain, submit the following documents to the Agency:

      A — An official, written document duly executed in accordance with the provisions of the law, whereby the banking firm appoints an agent in the State of Bahrain upon whom all writs of summons and process papers addressed to such firm shall be served.
      B — A written certificate of appointment, which may from time to time be replaced by a new such certificate, stating the name and address of the General Manager, the Manager, the authorized official or agent, or any other person in the State of Bahrain who had an official connection with foreign institutions.

    • Article 60

      It is prohibited for any person, without a license issued to him under the provisions of the preceding articles, to engage in banking operations or to act as agent of any foreign financial or investment interests that are not licensed to engage in banking operations in the State of Bahrain. It shall also be prohibited for such a person to represent such interests or to carry out any activity for their account in the State of Bahrain. Whoever shall act in contravention of the foregoing shall be punished by a term of imprisonment not exceeding six months and/or a fine not exceeding 1,000 (one thousand) dinars, in addition to the closure of his place of business.

    • Article 61

      Except for financial firms that operate as banking firms it shall be prohibited for any person, without the approval of the Agency, to use the word "Bank" or its synonyms in any language, or any other word indicating the performance of banking operations, in the special name, description or commercial style used by such person in doing business in the State of Bahrain. Nor shall such a person use or continue to use any synonyms having this meaning in his invoices, letters, notifications, notices or in any other way in the practice of his profession in the State of Bahrain. Whoever shall contravene these provisions shall be punished by a term of imprisonment not exceeding six months and/or a fine not exceeding 1,000 (one thousand) dinars.

    • Article 62

      It must be ascertained, before granting the license to any banking firm, that the commercial style it has adopted is not so closely similar to the name of any other firm as to cause confusion to the public or give rise to any mis-apprehension in this connection.

      No banking institution may, without the written approval of the Agency, change its commercial style mentioned in the license granted to it.

    • Article 63

      The license issued pursuant to this law must be exhibited and remain so in a conspicuous place on the premises open to the public, such as the head office and other offices, branches and other business premises of any banking firm or agent or representative in the State of Bahrain.

    • Article 64

      The license issued to a banking firm shall give it the right to operate in the place or places designated in the license. No banking firm may, without the approval of the Agency, open a new place of business, change or close an existing place of business in the State of Bahrain. Before granting such approval, the Agency may make the necessary inspection.

    • Article 65

      A — Banking firms operating in the State of Bahrain may not, without the prior approval of the Agency:
      1 — Merge or combine with others.
      2 — Transfer all, or a major part of their assets or liabilities in the State of Bahrain, except so far as such transfer is effected within the normal scope of their operations.
      3 — Make any modification in their capital.
      4 — Modify their Memorandum of Association, by laws, or any other document pertaining to their organization.
      B — The Agency's Board of Directors shall lay down a special regulation containing the rules and formalities to be followed by banking firms when merging or combining together.

    • Article 66

      The Agency may, in the following cases, cancel the license granted
      A — If the licensee has not started to operate within six months after being granted the license.
      B — If he acts in contravention of the conditions of the license or fails to follow the formalities prescribed by the Agency pursuant to the provisions of Article (65).
      C — If he repeatedly violates any of the provisions of this Law.
      D — If he suspends his operations in the State of Bahrain. Before cancelling the license, the Agency shall notify the banking firm involved or the agent or representative concerned of its intention to cancel the license, and shall give the party involved reasonable time to object to such cancellation and state the grounds on which its objection stands. Then the Agency shall, after securing the approval of the Minister of Finance, notify the party concerned, whether this is a banking firm, an agent or a representative, of its decision on the subject.

    • Article 67

      Upon cancelling the license, the Agency shall publish the decision of cancellation in the Official Gazette, in a circulating local newspaper, and on the premises of the main office of the banking firm, agent or representative, in the State of Bahrain. The Agency shall also take such other action as is necessary to make this cancellation known to the public.

    • Article 68

      In case the Agency issues a decision refusing to grant a license to a banking firm, agent representative, or any other person who has filed an application pursuant to the provisions of the Articles referred to above, the applicant may file with the Minister of Finance an appeal from the Agency's decision within thirty days following his receipt of the Agency's notification advising him of its decision. After hearing both parties, the Minister of Finance shall either confirm the Agency's decision and make it final, or order the approval of any request of suggested action.

    • Article 69

      If the Agency has reason to believe that a person is engaging in banking operations or is acting as agent or representative, without a valid license, the Agency may ask the competent Court to issue an order empowering it to examine the books, accounts and records of such person for the purpose of making sure whether or not an offence has been committed. Every person who has in his custody funds he had obtained as a result of his engaging in banking operations or of his acting as agent or representative without a license issued to him pursuant to the provisions of this law, must return such funds according to the instructions to be issued by the Agency.