BC-A BC-A Introduction
BC-A.1 BC-A.1 Purpose
BC-A.1.1
The purpose of this module is to lay down rules and guidelines that lay down the regulations and provide guidance on best practices that the banks should adhere to in relation to business and market conduct.
BC-A.1.2
This module provides support for certain other parts of the Rulebook, mainly:
(a) Principles of Business;(b) Audit Firms;(c) Public Disclosure;(d) High Level Controls;(e) Enforcement; and(f) BMA Reporting Requirements.BC-A.1.3
This module also provides support for certain aspects relating to business and market conduct in the Bahrain Commercial Companies Law of 2001 (as amended).
BC-A.2 BC-A.2 Key requirements
Promotion of financial products and services
BC-A.2.1
The Agency should be sent copies of documentation relating to promotional schemes at least ten days prior to their launch for information purposes.
BC-A.2.2
All documentation concerning promotional schemes should be in Arabic and English and, if relevant, any other language necessary for customers to fully understand and appreciate their terms and conditions. Such terms and conditions, including any related advertising, need to be clear, concise, truthful, unambiguous and complete so as to enable customers to make a fully informed decision.
Code of conduct for bank dealers and foreign exchange and money brokers in the interbank market
BC-A.2.3
Management of banks and money brokers are responsible for ensuring that their institutions are in full compliance with the Code.
BC-A.2.4
Brokers should pass details verbally, and principals be prepared to receive them, normally within a few minutes after deals have been concluded.
Disclosure of information about individual accounts
BC-A.2.5
Banks should not publish or release information to third parties concerning the accounts or activities of their individual customers, unless:
(a) such information is requested by an authorised official from the BMA or by an order from the Courts; or(b) the release of such information is approved be the customer concerned.Minimum balance and charges on saving investment accounts
BC-A.2.6
Banks may impose no more than a monthly charge of BD 1 when the monthly weighted average balance for saving investment accounts for individuals falls below BD 20 (or equivalent in other currencies).
BC-A.2.7
Orphans, widows, pensioners, individuals receiving social subsidies from the Ministry of Labour & Social Affairs, students and Bahraini nationals with a monthly salary below BD 250 should be exempted from maintaining the above minimum balance requirement for saving investment accounts.
Disclosure of charges
BC-A.2.8
Banks should also ensure that each customer is in receipt of its current list of charges. The list should specify standard charges and commissions that will be applied by the bank to individual services and transactions and to specific areas of business.
Accounts held for clubs and societies in Bahrain
BC-A.2.9
The FCB is requested to notify GOYS when any club or society registered with GOYS requests the opening of an account with the bank.
Current accounts
BC-A.2.10
FCBs levying fees on their low-balance customer current accounts, are required by the Agency to apply such fees to average balances when these fall below a prescribed level during a specified period.
Notification to the Agency on introduction of new or expanded customer products and facilities
BC-A.2.11
All full commercial banks are required to consult the Agency before the introduction of any new or expanded customer products and facilities.
Penalty system for dishonoured cheques
BC-A.2.12
On the first working day of each calendar month, each FCB will provide to the Agency a list of the names, supported with I.D. numbers (CPR or CR numbers (as applicable) for Bahrain
residents , Passport or CR-equivalent numbers (as applicable) for non-Bahrain residents) of those customers to whom one (or more) written warning(s) has been sent in accordance with section BC-5.1 during the immediately preceding calendar month.BC-A.2.13
Concerned FCB(s) will be required not to provide current account facilities to the abuser of cheques for the twelve calendar month period immediately following the date of issue of the relevant list (as mentioned in section BC-5.1) by the Agency. All other FCBs should, within a maximum period of one month after the issue of the relevant list, also withdraw current account facilities from that abuser of cheques for the same twelve calendar month period.
General guidance on administration of dishonoured cheques
BC-A.2.14
FCBs which wish to issue cheque guarantee cards for an amount not exceeding BD 200 may do so – subject to informing the Director of Banking Services at the Agency of their intention and the arrangements governing the issue of such cards.
Penalty charges on dishonoured cheques
BC-A.2.15
The Agency will impose penalty charges of BD 5 (five Bahraini Dinars) on each returned cheque for the reasons of 'Refer to Drawer', 'Not Arranged For', 'Re-present', and 'Account Closed'.
BC-A.2.16
FCBs will be entitled to charge customers no more than BD 10 (ten Bahraini Dinars) in respect of each dishonoured cheque.
Installation of an off-site ATM in Bahrain
BC-A.2.17
FCBs wishing to install an off-site ATM must submit an application (in writing) for the BMA's (Executive Director of Financial Institutions Supervision) approval. This application must be accompanied by a copy of a feasibility study for that particular ATM, as well as such other information as the BMA may request. In particular, a copy of the written permission (for installation of that off-site ATM) of the legal owner of the proposed location must be provided to the Agency, as well as a copy of the written permission of any other relevant authorities in this context (e.g. the Traffic & Licensing and Civil Defence & Fire Service Directorates of the Ministry of Interior).
GCC ATM network charges
BC-A.2.18
The Agency requires that the charges on such customer withdrawals and other ATM services should not exceed BD 1 (one Bahraini Dinar) per transaction.
Minimum terms and conditions
BC-A.2.19
All Mudaraba contracts entered into by a bank (whether new or renewed contracts) should meet the standards referred to under paragraph BC-7.1.1.
BC-A.2.20
Banks must have a policy statement as to the policies and procedures in place to safeguard the interest of the PSIA holders. The banks must agree the Policy Statement with the Agency before 20 January 2002.
Margin Trading System
BC-A.2.21
FCBs may write to the Agency to obtain approval to provide margin trading facilities to their customers. FCBs must follow the rules and guidance in Chapter BC-8.
BC-A.3 BC-A.3 Regulation history
BC-A.3.1
This module was first issued on 1st January 2005 as part of the Islamic principles volume. All regulations in this volume have been effective since this date. All subsequent changes are dated with the month and year at the base of the relevant page and in the Table of Contents. Chapter 3 of Module UG provides further details on Rulebook maintenance and control.
BC-A.3.2
The most recent changes made to this module are detailed in the table below:
Summary of changes
Module Ref. Change Date Description of Changes BC-4.6 01/10/05 Streamlined requirements for new products BC-8 01/04/06 Margin trading rules and guidance Effective date and evolution of the Module
BC-A.3.3
Prior to the Rulebook, the Agency had issued various circulars covering different aspects of Business and Market Conduct. These circulars have now been consolidated into this module. The contents of this module are effective from the date depicted in the original circulars listed below or from the dates indicated in paragraph BC-A.3.2 above:
Circular Ref. Date of Issue Module Ref. Circular Subject EDBC/73/96 1 May 1996 BC-1.1 Explanatory note on the promotion of Banking and Financial Products offered in/from Bahrain by Means of Incentives etc. BS.C7/91/442 10 Sep 1991 BC-1.1 Promotion of Banking Services 85/25 2 May 1985 BC-2 Code of Conduct for Foreign Exchange Dealers and Brokers 83/5 10 Apr 1983 BC-3 Disclosure of Information about Individual Accounts BS.C7/90/34 31 Jan 1990 BC-4.2 Dinar Certificates of Deposits EDBO/51/02 2 Apr 2002 BC-4.2 Charges to Customers BC/5/00 8 Mar 2000 BC-4.3 Accounts held for Clubs and Societies in Bahrain BSD(111)/94/1507 24 Sep 1994 BC-4.4 Fees on Current Accounts BC/2/01 3 Mar 2001 BC-4.5 Brokerage Fees in Bahrain ODG/145/92 18 Aug 1992 BC-4.6 New or expanded products and facilities in the Retail Banking Field EDBO/46/03 8 Apr 2003 BC-4.7 Inheritance — Financial Procedures EDBO/27/96 25 Sep 1996 BC-5.1 Regulation Relating to a Penalty System for "Dishonoured Cheques" OG/399/94 28 Nov 1994 BC-5.2 Returned Cheques EDBO/49/01 6 May 2001 BC-5.3 Penalty Charges on Returned Cheques BC/8/98 24 May 1998 BC-6.1 Off-site ATMs EDBO/45/02 13 Mar 2002 BC-6.2 GCC ATM Network Charges EDBC/105/96 26 June 1996 BC-7 Mudaraba Contracts — Minimum Terms and Conditions BS/11/2004 10 August 2004 BC-4 Bank Charges on Savings Accounts
