• BC-A BC-A Introduction

    • BC-A.1 BC-A.1 Purpose

      • BC-A.1.1

        This Module contains requirements that have to be met by Islamic bank licensees with regards to their dealings with its stakeholders. The Rules contained in this Module aim to ensure that Islamic bank licensees deal with their stakeholders in a fair and open manner, and address their stakeholders' information needs.

        Amended: July 2015
        October 07

      • BC-A.1.2

        The Rules build upon several of the Principles of Business (see Module PB (Principles of Business)). Principle 1 (Integrity) requires Islamic bank licensees to observe high standards of integrity and fair dealing, and to be honest and straightforward in their dealings with customers. Principle 3 (Due skill, care and diligence) requires Islamic bank licensees to act with due skill, care and diligence when acting on behalf of their customers. Principle 7 (Client Interests) requires Islamic bank licensees to pay due regard to the legitimate interests and information needs of their customers, and to communicate with them in a fair and transparent manner.

        October 07

      • 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).

        October 07

      • Legal Basis

        • BC-A.1.4

          This Module contains the Central Bank of Bahrain's ('CBB') Directive (as amended from time to time) on business conduct by Islamic bank licensees, and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain of Bahrain and Financial Institutions Law 2006 (CBB Law). The directive in this Module is applicable to all Islamic bank licensees.

          Amended January 2011
          October 07

        • BC-A.1.5

          For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.

          October 07

    • BC-A.2 BC-A.2 Scope of Application and Key Requirements

      • BC-A.2.1

        This Module applies to all Islamic bank licensees unless indicated otherwise.

        Amended: July 2015
        October 07

      • BC-A.2.2

        Bahraini Islamic bank licensees must ensure that their branches and subsidiaries operating in foreign jurisdictions comply, at a minimum, with local conduct of business standards and regulatory requirements (where applicable).

        Amended: July 2015
        Amended: October 2011
        Amended: April 2008
        October 2007

      • BC-A.2.3

        For overseas Islamic bank licensees, these requirements only apply to the business and customers of the Bahrain branch.

        Added: July 2015

      • BC-A.2.4

        The CBB encourages Bahraini Islamic bank licensees to apply—with respect to their overseas branches and subsidiaries—conduct of business standards at least equivalent to those set out in this Module. Where this is not the case, the CBB will consider any potential risk to the Islamic bank licensee that may arise through adverse reputational or other consequences.

        Added: July 2015

      • BC-A.2.5

        This Module covers the following activities by Islamic bank licensees:

        (a) General Principles (Chapter BC-B);
        (b) Promotion of financial products and services (Chapter BC-1);
        (c) Code of Conduct for bank dealers and foreign exchange dealers (Chapter BC-2);
        (d) Client confidentiality (Chapter BC-3);
        (e) Customer account services and charges (Chapter BC-4);
        (f) Dishonoured cheques (Chapter BC-5);
        (g) ATMs and charges for their use (Chapter BC-6);
        (h) Mudaraba contracts (Chapter BC-7);
        (i) Margin trading system (Chapter BC-8);
        (j) Regulated banking services (Chapter BC-9);
        (k) Customer complaints procedures (Chapter BC-10); and
        (l) Measures and Procedures for Services Provided to Disabled Customers by Bahraini Retail Banks (Chapter BC-11).
        Amended: April 2016
        Added: July 2015

    • BC-A.3 BC-A.3 Module History

      • BC-A.3.1

        This Module was first issued on 1st January 2005 by the BMA as part of the Islamic principles volume. Any material changes that have subsequently been made to this Module are annotated with the calendar quarter date in which the change was made: Chapter UG-3 provides further details on Rulebook maintenance and version control.

        October 07

      • BC-A.3.2

        When the CBB replaced the BMA in September 2006, the provisions of this Module remained in force. Volume 2 was updated in October 2007 to reflect the switch to the CBB; however, new calendar quarter dates were only issued where the update necessitated changes to actual requirements.

        October 07

      • BC-A.3.3

        The most recent changes 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
        BC-A.1 10/2007 New Rule BC-A.1.4 introduced, categorising this Module as a Directive.
        BC-9 04/2008 New Investment Business related requirements for conduct of business.
        BC-4.8 04/2008 New requirement to comply with Code of Best Practice on Consumer Credit and Charging.
        BC-8.2 07/2009 Removal of numerical restrictions related to margin trading requirement.
        BC-9.5.17 10/2010 Clarified the wording of Rule by replacing the term "legal" with "licensing".
        BC 01/2011 Various minor amendments to ensure consistency in formatting of CBB Rulebook
        BC-A.1.4 01/2011 Clarified legal basis.
        BC-1.1.13 01/2011 Corrected reference to Ministry of Industry and Commerce.
        BC-8 01/2011 Changes made to reflect new definitions related to licensed exchange(s).
        BC-1.1.11 04/2011 Clarified retention period of records for promotional schemes.
        BC-3.1.1 and BC-4.2 04/2011 Minor amendments to clarify Rules.
        BC-A.2.2 10/2011 Added new Section to list of activities covered by this Module.
        BC-4.6.3 10/2011 Deleted Paragraph. Reduced notification requirements on new or expanded products and facilities.
        BC-4.7.2 10/2011 Updated name of Ministry of Justice and Islamic Affairs.
        BC-4.9 10/2011 Added new Section on transaction advice.
        BC-9.11 and BC-10 10/2011 Replaced Section BC-9.11 dealing with complaints and added Chapter BC-10 Customer Complaints Procedures in line with results of consultation and made it applicable to all regulated banking services.
        BC-10 01/2012 Minor corrections to correct typos and clarify language.
        BC-10.3.9 01/2012 Paragraph deleted as it repeats what is in Paragraph BC-10.3.7.
        BC-6.1.6 04/2012 Cross reference added.
        BC-6.1.10 and BC-6.1.11 04/2012 Rule clarified and split into one Rule and one Guidance Paragraphs.
        BC-9.2.1 04/2012 Corrected cross reference.
        BC-1.2 07/2012 Added Section on advertisements for retail banking products and services.
        BC-4.2.3 07/2012 Paragraph deleted as cross-reference is not applicable.
        BC-9.5.12A 07/2012 Added guidance to clarify promotion material from banks.
        BC-10.1.3A 07/2012 Added guidance on the appointment of the customer complaints officer.
        BC-1.1.2 10/2012 Added cross reference to advertising requirements under Section BC-1.2.
        BC-4.2 10/2012 Section amended to reflect outcome of consultation on disclosure of interest/profit rate fees and charges by retail banks.
        BC-4.7 10/2012 Amended to make Rules clearer.
        BC-6.1.2 10/2012 Clarified process for applications for the installation of off-site ATMs.
        BC-4.3 01/2013 This Section was deleted and requirements are now covered under Section FC-1.6.
        BC-1.2.2 04/2013 Corrected cross reference.
        BC-4.2.2 04/2013 Clarified Rule on instances when customers must be kept informed of charges.
        BC-9.9.14 and BC-9.9.16(e)(v) 04/2013 Clarified Rules on allocations.
        BC-10.7 07/2013 Additional details provided on reporting of complaints.
        BC-5.3 10/2013 Updated penalty charges on dishonoured cheques.
        BC-6.3 01/2014 Added new Section on local ATM network charges.
        BC-4.2 04/2014 Changes made to align language with Islamic terminology.
        BC-4.11 04/2014 Added new Section on donations to NGO accounts.
        BC 07/2015 Module amended to reflect IFSB-9 'Guiding principles on conduct of business for institutions offering Islamic financial services'.
        BC-B.2.1 and BC-9.9.22 10/2015 Corrected cross reference.
        BC-B.5.10 10/2015 Deleted incorrect cross reference.
        BC-B.5.12A 10/2015 Added guidance on when a 'cooling off period' may be waived.
        BC-4.12 10/2015 Added new Section on credit check reports.
        BC-9.12.15 10/2015 Minor correction.
        BC-9.13.9 10/2015 Deleted reference to securities lending.
        BC-A.2.5, and BC-11 04/2016 Added new Section on Measures and Procedures for Services Provided to Disabled Customers.
        BC-6.3 04/2016 Amendment to local ATM charges.
        BC-6.1.6 07/2016 Deleted reference to Ministry of Interior.
        BC-4.6 10/2016 Updated Section on "Notification to the CBB on Introduction of New or Changes to Customer Products and Facilities"
        BC-4.9.1 10/2016 Amendment to Transaction Advice
        BC-8.2.5 10/2016 Rectified term 'Credit Reference Bureau'
        BC-5A 01/2017 Added new Section on Return Policy — Post-Dated Cheques
        BC-11.1, BC-11.2 and BC-11.3 04/2017 Amended Sections to clarify applicability of Rules.
        BC-5.3.1 07/2017 Amended Paragraph to include penalty charges on returned cheques for the reason of Insufficient Funds.
        BC-4.1 04/2018 Deleted Section on "Minimum Balance and Charges on Savings Accounts".
        BC-4.13 04/2018 Added new Section on "Fees and Charges for Services Provided to Individuals".
        BC-5.3.2 04/2018 Deleted Paragraph on "Dishonoured Cheques'.
        BC-6.2 04/2018 Deleted Section on "GCC ATM Network Charges".
        BC-6.3 04/2018 Deleted Section on "Local ATM Network Charges".
        BC-4.2.28A 07/2018 Added new Paragraph on existing "Early Repayment" requirements.
        BC-4.14 10/2018 Added a new Section on Fees and Charges for Services Provided to Companies under Formation.
        BC-12 10/2018 Added a new Chapter on Financial Advice Programme.
        BC-4.2.22 01/2019 Amended Paragraph on disclosure of charges by retail banks.
        BC-4.2.24 01/2019 Amended Paragraph on disclosure to individual customers.
        BC-4.2.25A 01/2019 Added a new Paragraph on rounding off in transactions.
        BC-4.13.2 01/2019 Added a new Paragraph on waived fees and charges.
        BC-4.15 07/2019 Added a new Section on Profit/Fees on Credit Card Transactions.
        BC-4.16 10/2019 Added a new Section Profit on Credit Facilities.
        BC-6.1 10/2019 Deleted Section.
        BC-11.2.2 01/2020 Amended Paragraph.
        BC-4.17 04/2020  Added a new Section on Blocking Customer Accounts. 
        BC-10.3.15  04/2020 Amended Paragraph adding reference to CBB consumer protection. 
        BC-10.5.6 04/2020 Amended Paragraph adding reference to CBB consumer protection. 
        BC-10.7.1 -
        BC-10.7.3 
        04/2020 Amended Paragraph adding reference to CBB consumer protection. 
        BC-C 10/2020 Added a new chapter on Provision of Financial Services on a Non-discriminatory Basis.
        BC-4.18 10/2020 Added a new Section on Fund Transfers by Customers of Payment Service Providers (PSP).
        Table of Content 04.2021 Amended Appendix BC-7 title in ToC.
        BC-4.19 04/2021 Added a new Section on ‘Merchant Fees on Payments to Zakat and Charity Fund’.
        BC-1.2.1 07/2021 Deleted Paragraph.
        BC-1.2.2 07/2021 Deleted Paragraph.
        BC-4.2.6 07/2021 Amended Paragraph.

      • Effective Date and Evolution of the Module

        • BC-A.3.4

          Prior to the Rulebook, the CBB 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-3.3 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.
          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
          BSD(111)/94/157 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 products 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 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
          EDBS/KH/C/73/2018 22 Nov 2018 BC-4.2.25A Rounding off in Transactions.
          Amended: January 2019
          Amended: October 2010
          October 07