IC-A.1.1

The Internal Capital Adequacy Assessment Process ('ICAAP') Module sets out the CBB's requirements relating to banks' obligations under Pillar 2 with respect to ICAAP for assessing their overall capital adequacy in relation to their risk profile. It seeks to encourage banks to develop and use better risk management techniques in identifying, monitoring and managing their risks, and to ensure that a licensee has a rigorous process in place for determining the adequacy of its capital to support all risks to which it is exposed.

IC-A.1.2

ThisModule must be read in conjunction with other parts of the Rulebook, mainly:

IC-A.1.3

This Module contains the Central Bank of Bahrain's ('CBB') Directive (as amended from time-to-time) relating to ICAAP and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). The Directive in this Module is an important component of the CBB's Supervisory Review Process and is applicable to all Bahraini Islamic bank licensees (including their approved persons).

IC-A.1.4

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

IC-A.2.1

This Module is first issued in July 2018 as part of Volume Two of the CBB Rulebook. All requirements in this Module are effective from the date of issuance. 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.

IC-A.2.2

The most recent changes made to this Module are detailed in the table below:

Summary of Changes