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  • Chapter 5 Chapter 5 The Deposits and Unrestricted Investment Accounts Protection Funds

    • Article 13

      For the purpose of this Regulation, the Board shall form and administer two separate funds referred to as the Conventional Banks Fund and the Islamic Banks Fund. Each Fund shall constitute a separate legal entity and shall have an independent balance sheet from the CBB.

    • Article 14

      1) Conventional Banks shall collectively contribute an initial aggregate amount of BD60 million (Sixty Million Bahraini Dinars) over a period of fifteen years and title to such monies once contributed shall legally belong to the Conventional Banks Fund.
      2) Islamic Banks shall collectively contribute an initial aggregate amount of BD20 million (Twenty Million Bahraini Dinars) over a period of fifteen years and title to such monies once contributed shall legally belong to the Islamic Banks Fund.
      3) The Board is required to periodically assess the size of the Conventional Fund and Islamic Fund in relation to liabilities to be covered and, where appropriate, make recommendations to the CBB for increasing or decreasing the amounts of the Conventional Fund and Islamic Fund.

      No such adjustments to the aggregate amount (BD Eighty Million Bahraini Dinars for both Funds) shall be made without the express approval of the CBB.

    • Article 15

      1) The contribution of each Conventional Bank or Islamic Bank in the total amount of the respective Funds shall be determined on an annual pro-rata basis of the total Eligible Accounts of all Conventional Banks and Islamic Banks in the Kingdom. The CBB shall provide the Board with the necessary data to allow it to determine the amounts of contributions each Conventional Bank or Islamic Bank shall make. The Board may allow the Conventional Bank or Islamic Banks to make its contribution in the form of monthly instalments which shall be charged against the profit & loss account of these Banks.
      2) No contribution (or part thereof) shall be refundable to a Conventional Bank or Islamic Bank in any circumstance.

    • Article 16

      Conventional Banks and Islamic Banks shall pay the contributions referred to in Article 15 above within the periods specified by the Board. Each Conventional Bank or Islamic Bank shall be notified of the amount of its calculated contribution as well as the date of payment thereof.

      In the event of failure of any Conventional Bank or Islamic Bank in the payment of the full contribution during the periods specified by the Board, the CBB may take disciplinary action against that Bank, including the imposition of administrative fines in accordance with Article 129 of the Law and, in cases of repeated violation, withdrawal of the licence granted by the CBB.

    • Article 17

      In the event that a new Conventional Bank or Islamic Bank joins a Fund during any year, the Board may determine the contribution of that Bank to the Fund on the basis of the minimum payment made by other participating banks during that year for the remaining period of the year after dividing the full contribution amount over the number of months of a year. At the beginning of the following year, there will be an assessment of that Bank's contribution based on the size of its Eligible Accounts base.

    • Article 18

      The Board shall determine the investment policy of the Funds and the CBB shall be responsible for implementing such policy without receiving any commission or charges in return. Investments made from the Islamic Fund must comply with Islamic Shari'a principles and be under the supervision of the CBB's Sharia' Board.