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  • GR-7 GR-7 Cessation of Business

    • GR-7.1 GR-7.1 CBB Approval

      • GR-7.1.1

        As specified in Article 50 of CBB Law, an Islamic bank licensee wishing to cease to provide or suspend any or all of the licensed regulated services, completely or at any of its branches must obtain prior written approval from the CBB, setting out how it proposes to do so and, in particular, how it will treat any Shari'a money placements/deposits, and investment accounts, that it holds.

        Amended: October 2011
        October 07

      • GR-7.1.2

        [This Paragraph was deleted in October 2011].

        Deleted: October 2011

      • GR-7.1.3

        If the Islamic bank licensee wishes to liquidate its business, the CBB will revise its license to restrict the firm from entering into new business. The licensee must continue to comply with all applicable CBB requirements until such time as it is formally notified by the CBB that its obligations have been discharged and that it may surrender its license.

        October 07

      • GR-7.1.4

        In the case of a Bahraini Islamic bank licensee, Chapter GR-7 applies both to its business booked in Bahrain and the licensee's overseas branches. In the case of branches of foreign bank licensees, Chapter GR-7 applies only to business booked in the licensee's Bahrain branch.

        Amended: April 2020
        Adopted: October 2011

      • GR-7.1.5

        Licensees seeking to obtain the CBB's permission to cease business must apply to the CBB in writing, in the form of a formal request together with supporting documents. Unless otherwise directed by the CBB, the following information/documentation must be provided in support of the request:

        (a) Full details of the business to be terminated;
        (b) The rationale for the cessation;
        (c) How the Islamic bank licensee proposes to cease business;
        (d) Notice of an extraordinary shareholder meeting setting out the agenda to discuss and approve the cessation, and inviting the CBB for such meeting;
        (e) Evidence that the proposed cessation has been duly authorised by the Islamic bank licensee (such as a certified copy of a Board resolution approving the cessation);
        (f) Formal request to the CBB for the appointment of a liquidator acceptable to the CBB;
        (g) A cut-off date by which the Islamic bank licensee will stop its operations;
        (h) If the Islamic bank licensee wishes to cease its whole business, confirmation that the Islamic bank licensee will not enter into new business with effect from the cut-off date;
        (i) If applicable, an assessment of the impact of the cessation on any customers directly affected by the cessation, and any mitigating factors or measures; and
        (j) If applicable, an assessment of the impact of the cessation on the Islamic bank licensee's remaining business and customers, and any mitigating factors or measures.
        Adopted: October 2011

      • GR-7.1.6

        Islamic bank licensees intending to apply to cease business are advised to contact the CBB at the earliest opportunity, prior to submitting a formal application, in order that the CBB may determine the nature and level of documentation to be provided and the need for an auditor or other expert opinion to be provided to support the application. The information/documentation specified in Paragraph GR-7.1.5 may be varied by the CBB, depending on the nature of the proposed cessation, such as the materiality of the business concerned and its impact on customers.

        Adopted: October 2011

      • GR-7.1.7

        Approval to cease business will generally be given where adequate arrangements have been made to offer alternative arrangements to any affected customers. The CBB's approval may be given subject to any conditions deemed appropriate by the CBB. In all cases where additional requirements are imposed, the CBB shall state the reasons for doing so.

        Adopted: October 2011

      • GR-7.1.8

        An Islamic bank licensee in liquidation must continue to meet its contractual and regulatory obligations to depositors, other clients and creditors.

        Amended: October 2011
        October 07

      • GR-7.1.9

        [This Paragraph was deleted in October 2011].

        Deleted: October 2011

      • GR-7.1.10

        [This Paragraph was deleted in October 2011].

        Deleted: October 2011

      • GR-7.1.11

        [This Paragraph was deleted in October 2011].

        Deleted: October 2011

      • GR-7.1.12

        Upon satisfactorily meeting the requirements set out in GR-7.1.4, the Islamic bank licensee must surrender the original license certificate issued by the Licensing Directorate at the time of establishment, and submit confirmation of the cancellation of its commercial registration from the Ministry of Industry, Commerce and Tourism.

        Amended: April 2020
        Added: October 2016