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  • EN-6.1 EN-6.1 CBB Policy

    • EN-6.1.1

      Under Chapter 2 "Procedures to be taken before penalties or administrative proceedings are applied" and Chapter 3 "Penalties and administrative proceedings" of Part 9 of the CBB Law, the CBB may impose financial penalties on licensees or persons referred to in paragraph (b) of Article (68 bis 1) of the CBB Law and its amendments (in particular Article 129). The CBB shall use judgement and will take into account relevant facts in determining the need to impose financial penalties. Financial penalties are thus normally preceded by the issuance of a written formal notice and/or Direction.

      Amended: July 2018
      Amended: April 2016
      Amended: October 2010
      Added: October 2007

    • EN-6.1.2

      The level of financial penalty applied is determined by the nature of the contravention and the amount of additional supervisory attention and resources taken up by a licensee's or persons' referred to in paragraph (b) of Article (68 bis 1) of the CBB Law behaviour and by limits set in the CBB Law. The CBB will apply the methodology set out in Appendix A to determine the size of the penalty. The CBB intends that the impact of a penalty should derive more from its signaling effect than from the actual amount of money involved.

      Amended: July 2018
      Amended: April 2016
      Amended: October 2010
      Added: October 2007

    • EN-6.1.2A

      In accordance with Article 129 of the amendment to the CBB Law, the maximum financial penalty levied for failing to comply with CBB Law, Regulations, Directives and other requirements is BD 100,000 per violation. The CBB may opt to limit the amount of the financial penalty and use other enforcement measures as outlined in this Module, such as imposing restrictions on an Islamic bank licensee limiting the scope of operations.

      Added: July 2018

    • EN-6.1.3

      As indicated in Paragraph EN-1.3.3, the CBB requires disclosure by Bahraini Islamic bank licensees in their annual report of any financial penalties served on them, together with a factual description of the reasons given by the Central Bank for applying the penalty. In addition, the CBB may publicise the issuance of a financial penalty notice, where there is a strong case that doing so would help achieve the CBB's supervisory objectives, as mentioned in Article 132 of the pre-mentioned Law.

      Amended: October 2019
      Amended: October 2010
      Added: October 2007

    • EN-6.1.3A

      As indicated in Paragraph EN-1.3.3, the CBB requires disclosure by branches of foreign bank licensees in their annual audited financial statements of any financial penalties served on them, together with a factual description of the reasons given by the Central Bank for applying the penalty. In addition, the CBB may publicise the issuance of a financial penalty notice, where there is a strong case that doing so would help achieve the CBB's supervisory objectives, as mentioned in Article 132 of the pre-mentioned Law.

      Added: October 2019

    • EN-6.1.4

      Examples of the types of compliance failings that may lead to the serving of a financial penalty notice are outlined in Part 11 of the CBB Law and may include (but are not limited to):

      (a) Failures to address persistent delays and/or significant inaccuracies in regulatory reporting to the CBB;
      (b) Repeated failures to respond to formal requests for information from the CBB, within the deadlines set;
      (c) The submission of information to the CBB known to be false or misleading; and
      (d) Major failures in maintaining adequate systems and controls in accordance with the CBB's requirements, subjecting depositors and other customers to significant risk of financial loss.
      Amended: October 2010
      Added: October 2007

    • EN-6.1.5

      In assessing whether to serve a financial written penalty notice, the CBB takes into account the following criteria:

      (a) the seriousness of the contravention, in relation to the requirement(s) concerned;
      (b) the duration and/or frequency of the contravention, and the extent to which it reflects more widespread weaknesses in controls and/or management;the extent to which the contravention was deliberate or reckless;
      (c) the licensee's past compliance record and conduct following the contravention; and
      (d) the scope of any other action taken by the CBB or other regulators against the licensee, in response to the compliance failures in question.
      Additional criteria are set out in Appendix A.
      Amended: July 2018
      Amended: October 2010
      Added: October 2007

    • EN-6.1.6

      The imposition of a financial penalty does not preclude the CBB from also using other enforcement measures to remedy the same violation (for instance, a Direction).

      Added: October 2007

    • EN-6.1.7

      A written notice of a financial penalty must be issued before imposing any financial penalty. The written notice must contain the following information:

      (a) the violations committed by the licensee with respect to CBB Law; or the prudential Rulebook; or any Directions, warnings or formal requests for information; or violations of the terms and conditions of the license issued to the licensee;
      (b) evidence or proof to support the above;
      (c) the level of financial penalty to be imposed;
      (d) the grace period to be allowed to the licensee for challenging the intended penalty (which will not be less than 30 days).
      Amended: October 2010
      Added: October 2007

    • EN-6.1.8

      The licensee may either pay the penalty or object within the above period. The CBB will consider any objection and make a formal resolution within 30 days of receiving the objection. Thereafter, the formal resolution and any accompanying penalties are final and must be paid within 30 days.

      Amended: October 2010
      Added: October 2007