GR GR Money Changers General Requirements Module
GR-A GR-A Introduction
GR-A.1 GR-A.1 Purpose
Executive Summary
GR-A.1.1
The General Requirements Module presents a variety of different requirements that are not extensive enough to warrant their own stand-alone Module, but for the most part are generally applicable. These include requirements on books and records; on the use of corporate and trade names; on
controllers andclose links, on security measures, counterfeit currency detection measures and loans extended to related parties.October 2010Legal Basis
GR-A.1.2
This Module contains the Central Bank of Bahrain's ('CBB') Directive (as amended from time to time) regarding general requirements applicable to
licensees , 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'). Requirements regarding controllers (see Chapter GR-5) also included in Regulations, to be issued by the CBB. Requirements regardingMoney Changer Licensees are also included in the Regulation Organising Money Changing Business, issued in 1994 and included in this Module.Amended: January 2011
October 2010GR-A.1.3
For an explanation of the CBB's rule-making powers and different regulatory instruments, see section UG-1.1.
October 2010GR-A.2 GR-A.2 Module History
Evolution of Module
GR-A.2.1
This Module was first issued in October 2010 by the CBB. 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.
GR-A.2.2
A list of recent changes made to this Module is detailed in the table below:
Module Ref. Change Date Description of Changes GR-A.1.2 01/2011 Clarified legal basis. GR-2.1.1 01/2011 Clarified Rule regarding money in transfer. GR-7.1.2 01/2011 Clarified Guidance. GR-5.3.1A 04/2011 New Rule added for suitability of controllers. GR-9.1 07/2011 Several amendments made to be in line with other Volumes of the CBB Rulebook. GR-5.3.1 04/2012 Amended to be in line with other Volumes of the CBB Rulebook. GR-6 04/2012 Clarified language on cessation of business to be in line with other Volumes of the CBB Rulebook. GR-11.1 and GR-11.1.1A 01/2013 Clarified Rules and added Guidance dealing with credit facilities extended to related parties. GR-1.1.3 04/2013 Corrected reference to 'transaction' records. GR-7.1.4 10/2014 Added due date for Insurance Coverage Form GR-6.1.11 10/2016 Added an additional requirement for cessation of business to be consistent with other Volumes of the CBB Rulebook. GR-5.1.4 01/2017 Consistency of notification timeline rule on controllers with other Volumes of the CBB Rulebook. GR-1.2.1 07/2017 Amended paragraph according to the Legislative Decree No. (28) of 2002. GR-1.2.2 07/2017 Deleted paragraph. GR-4.1.3 10/2017 Added additional requirements to submit when requesting no-objection letter for proposed dividends. GR-1.1.1 10/2018 Amended Paragraph to be consistent with other Volumes. GR-5.1.1A 04/2019 Added a new Paragraph on exposure to controllers. GR-5.1.1B 04/2019 Added a new Paragraph on exposure to controllers. GR-1.2.1 01/2020 Amended Paragraph. GR-6.1.6 04/2020 Amended Paragraph. GR-6.1.11 04/2020 Amended Paragraph. GR-3.1.1 01/2022 Amended Paragraph on change in licensee corporate and legal name. GR-3.1.2 01/2022 Amended Paragraph on change to licensee legal name. Superseded Requirements
GR-A.2.3
This Module supersedes the following provisions contained in circulars or other regulatory instruments:
Circular Ref. Subject BS/07/2004 Record-keeping requirements. BC/24/1999 Accounts of Money Changers. BS/08/2004 Controllers of, and holdings and transfers of significant ownership or controlling interests in, Agency licensees OD/080/2007 Directives on Measures to Detect Counterfeit Currency FIS/C/001/2005 Security Measures for Money Changers ODG/118/2004 Review of Security Measures BC/6/99 Requirement of Bank Guarantee October 2010GR-B GR-B Scope of Application
GR-B.1 GR-B.1 Scope of Application
GR-B.1.1
The scope of application of Module GR (General Requirements) applies to all
Money Changer Licensees , thereafter referred to in this Module aslicensees .October 2010GR-1 GR-1 Books and Records
GR-1.1 GR-1.1 General Requirements
GR-1.1.1
In accordance with Articles 59 and 60 of the CBB Law, all
licensees must maintain books and records (whether in electronic or hard copy form) sufficient to produce financial statements and show a complete record of the business undertaken by alicensee . These records must be maintained for at least 10 years according to Article 60 of the CBB Law.Amended: October 2018
October 2010GR-1.1.2
GR-1.1.1 includes accounts, books, files and other records (e.g. trial balance, general ledger, nostro/vostro statements, reconciliations, list of counterparties). It also includes records that substantiate the value of the assets and liabilities activities of the
licensee .October 2010GR-1.1.3
Bahrain Law currently requires other transaction records to be retained for at least 5 years (see Ministerial Order No. 23 of 2002, made pursuant to Amiri Decree Law No. 4 of 2001).
Amended: April 2013
October 2010GR-1.1.4
Unless otherwise agreed to by the CBB in writing, records must be kept in either English or Arabic. Any records kept in languages other than English or Arabic must be accompanied by a certified English or Arabic translation. Records must be kept current. The records must be sufficient to allow an audit of the
licensee's business or an on-site examination of thelicensee by the CBB.October 2010GR-1.1.5
Translations produced in compliance with Rule GR-1.1.4 may be undertaken inhouse, by an employee or contractor of the
licensee , provided they are certified by an appropriate officer of thelicensee .October 2010GR-1.1.6
Records must be accessible at any time from within the Kingdom of Bahrain, or as otherwise agreed with the CBB in writing.
October 2010GR-1.1.7
Where older records have been archived, the CBB may accept that records be accessible within a reasonably short time frame (e.g. within 5 business days), instead of immediately.
October 2010GR-1.2 GR-1.2 Transaction Records
GR-1.2.1
Licensees must keep completed transaction records for as long as they are relevant for the purposes for which they were made (with a minimum period in all cases of five years from the date when the transaction was terminated). Records of terminated transactions must be kept whether in hard copy or electronic format as per the Legislative Decree No. (54) of 2018 with respect to Electronic Transactions “The Electronic Communications and Transactions Law” and its amendments.Amended: January 2020
Amended: July 2017
Added: October 2010GR-1.2.2
[This Paragraph has been deleted in July 2017].
Deleted: July 2017
October 2010GR-1.3 GR-1.3 Other Records
Corporate Records
GR-1.3.1
Licensees must maintain the following records in original form or in hard copy at their premises in Bahrain:(a) Internal policies, procedures and operating manuals;(b) Corporate records, including minutes ofshareholders ',Directors ' and management meetings;(c) Correspondence with the CBB and records relevant to monitoring compliance with CBB requirements;(d) Reports prepared by thelicensee's internal and external auditors; and(e) Employee training manuals and records.October 2010Customer Records
GR-1.3.2
Record-keeping requirements with respect to
customer records, includingcustomer identification and due diligence records, are contained in Module FC (Financial Crime).October 2010GR-2 GR-2 Money in Transfer
GR-2.1 GR-2.1 Money in Transfer
GR-2.1.1
All remittances must be pre-funded. In instances where remittances are not pre-funded, they must be channelled through a designated customer account at a
retail bank in the Kingdom of Bahrain. No claims by thelicensee can be made against this account.Amended: January 2011
October 2010GR-3 GR-3 Corporate and Trade Names
GR-3.1 GR-3.1 Vetting of Names
GR-3.1.1
Licensees must obtain CBB’s prior written approval for any change in their legal name.Licensees must notify the CBB of any change in their corporate name at least one week prior to effecting the proposed change.Amended: January 2022
Added: October 2010GR-3.1.2
In approving a change to a legal name, the CBB seeks to ensure that it is sufficiently distinct as to reduce possible confusion with other unconnected businesses, particularly those operating in the financial services sector.
Amended: January 2022
Added: October 2010GR-4 GR-4 Dividends
GR-4.1 GR-4.1 CBB Prior Approval
GR-4.1.1
Licensees must obtain the CBB's prior written approval to any dividend proposed to be distributed to the shareholders, before announcing the proposed dividend by way of press announcement or any other means of communication and prior to submitting a proposal for a distribution of profits to a shareholder vote.October 2010GR-4.1.2
The CBB will grant approval where it is satisfied that the level of dividend proposed is unlikely to leave the
licensee vulnerable — for the foreseeable future — to breaching the CBB's financial resources requirements, taking into account (as appropriate) trends in thelicensee's business volumes, expenses and performance.October 2010GR-4.1.3
To facilitate the prior approval required under Paragraph GR-4.1.1,
licensees subject to Paragraph GR-4.1.1 must provide the CBB with:(a) Thelicensee's intended percentage and amount of proposed dividends for the coming year;(b) A letter of no objection from thelicensee's external auditor on such profit distribution; and(c) A detailed analysis of the impact of the proposed dividend on the capital adequacy requirements outlined in Module CA (Capital Adequacy) and the liquidity position of the licensee.Amended: October 2017
October 2010GR-5 GR-5 Controllers
GR-5.1 GR-5.1 Key Provisions
GR-5.1.1
Licensees must obtain prior approval from the CBB for any of the following changes to theircontrollers (as defined in Section GR-5.2):(a) A newcontroller ;(b) An existingcontroller increasing its holding from below 20% to above 20%;(c) An existingcontroller increasing its holding from below 50% to above 50%; and(d) An existingcontroller reducing its holding from above 50% to below 50%.October 2010GR-5.1.1A
Licensees must not incur or otherwise have an exposure (either directly or indirectly) to theircontrollers , includingsubsidiaries andassociated companies of suchcontrollers .Added: April 2019GR-5.1.1B
For the purpose of Paragraph GR-5.1.1A,
licensees that already have an exposure tocontrollers must have an action plan agreed with the CBB's supervisory point of contact to address such exposures within a timeline agreed with the CBB.Added: April 2019GR-5.1.2
Articles 52 to 56 of the CBB Law require notification to the CBB of all
controllers oflicensees and of listed companies; it further gives the CBB the right to refuse approval ofcontrollers if deemed damaging to the interests of the market, customers, or in contravention of the criteria set by the CBB.October 2010GR-5.1.3
Requests for approval under Paragraph GR-5.1.1 must be made by submitting a duly completed Form 2 (Application for Authorisation of Controller) to the CBB. Notification must be made by the
controller or intendedcontroller , and by thelicensee where it is aware of the change.October 2010GR-5.1.4
If, as a result of circumstances outside the
licensee's knowledge and/or control, one of the changes specified in Paragraph GR-5.1.1 is triggered prior to CBB approval being sought or obtained, thelicensee must notify the CBB no later than 15 calendar days from the date on which those changes have occurred.Amended: January 2017
October 2010GR-5.1.5
For approval under Rule GR-5.1.1 to be granted, the applicant must satisfy the CBB that the proposed change in
controller poses no undue risks to thelicensee or its customers, and is not damaging to the interests of the market, as defined in the suitability criteria forcontrollers , contained in Section GR-5.3.October 2010GR-5.1.6
An approval of
controller is valid for the period specified in the approval letter issued by the CBB. The CBB may impose any restrictions that it considers necessary to be observed when granting its approval.October 2010GR-5.1.7
The approval process is specified in Section GR-5.4.
October 2010GR-5.2 GR-5.2 Definition of Controller
GR-5.2.1
A
controller of alicensee is a natural or legal person who, either alone or with his associates:(a) Holds 10% or more of the shares in thelicensee ('L'), or is able to exercise (or control the exercise of) more than 10% of the voting power in L;(b) Holds 10% or more of the shares in aparent undertaking ('P') of L, or is able to exercise (or control the exercise of) more than 10% of the voting power in P; or(c) Is able to exercise significant influence over the management of L or P.October 2010GR-5.2.2
For the purposes of Paragraph GR-5.2.1, 'associate' includes:
(a) In the case of natural persons, a member of thecontroller's family ;(b) An undertaking of which acontroller is aDirector ;(c) A person who is an employee or partner of thecontroller ; or(d) If thecontroller is a corporate entity, aDirector of thecontroller , a subsidiary of thecontroller , or aDirector of any subsidiary undertaking of thecontroller .October 2010GR-5.2.3
Associate also includes any other person or undertaking with which the
controller has entered into an agreement or arrangement as to the acquisition, holding or disposal of shares or other interests in thelicensee , or under which they undertake to act together in exercising their voting power in relation to thelicensee .October 2010GR-5.3 GR-5.3 Suitability of Controllers
GR-5.3.1
All new
controllers or prospectivecontrollers (as defined in Section GR-5.2) of aBahraini specialised licensee must obtain the approval of the CBB. Any increases to existingcontrollers' holdings or voting control (as outlined under Paragraph GR-5.1.1) must also be approved by the CBB and are subject to the conditions outlined in this Section. Such changes in existingcontrollers (as defined in the Section GR-5.2) or new/prospectivecontrollers of alicensee must satisfy the CBB of their suitability and appropriateness according to the criteria outlined in Paragraphs GR-5.3.2 to GR-5.3.5. The CBB will issue an approval notice or notice of refusal of a controller according to the approval process outlined in Section GR-5.4 and Paragraph GR-5.1.6.Amended: April 2012
October 2010GR-5.3.1A
For those
licensees authorised after 1st January 2011, at least onecontroller must be a regulated financial institution owning or controlling 20% or more of the voting capital.Added: April 2011GR-5.3.2
In assessing the suitability of
controllers who are natural persons, the CBB has regard to their professional and personal conduct, including, but not limited to, the following:(a) The propriety of a person's conduct, whether or not such conduct resulted in conviction for a criminal offence, the contravention of a law or regulation, or the institution of legal or disciplinary proceedings;(b) A conviction or finding of guilt in respect of any offence, other than a minor traffic offence, by any court or competent jurisdiction;(c) Any adverse finding in a civil action by any court or competent jurisdiction, relating to fraud, misfeasance or other misconduct in connection with the formation or management of a corporation or partnership;(d) Whether the person has been the subject of any disciplinary proceeding by any government authority, regulatory agency or professional body or association;(e) The contravention of any financial services legislation or regulation;(f) Whether the person has ever been refused a license, authorisation, registration or other authority;(g) Dismissal or a request to resign from any office or employment;(h) Disqualification by a court, regulator or other competent body, as aDirector or as a manager of a corporation;(i) Whether the person has been aDirector , partner or manager of a corporation or partnership which has gone into liquidation or administration or where one or more partners or managers have been declared bankrupt whilst the person was connected with that partnership or corporation;(j) The extent to which the person, has been truthful and open with regulators;(k) Whether the person has ever been adjudged bankrupt, entered into any arrangement with creditors in relation to the inability to pay due debts, or failed to satisfy a judgement debt under a court order or has defaulted on any debts;(l) The financial resources of the person and the likely stability of their shareholding, and their track record as acontroller or significant investor in financial institutions;(m) Existing Directorships or ownership of more than 20% of the capital or voting rights of any financial institution in the Kingdom of Bahrain or elsewhere, and the potential for conflicts of interest that such Directorships or ownership may imply;(n) The legitimate interests ofcustomers , creditors andshareholders (including minority shareholders) of thelicensee ;(o) Whether the approval of acontroller is or could be detrimental to Bahrain's financial sector; and(p) Whether the person is able to deal with existingshareholders and the Board in a constructive and cooperative manner.October 2010GR-5.3.3
Natural persons who intend to take a stake of 20% or more in a
licensee are subject to enhanced scrutiny. The level of scrutiny and the expected compliance with the above standards become more onerous as the level of proposed ownership increases.October 2010GR-5.3.4
Legal persons who intend to take a stake of 20% or more in a
licensee are subject to enhanced scrutiny, given the CBB's position as home supervisor of suchlicensees . The level of scrutiny and of expected compliance with the above standards becomes more onerous as the level of proposed ownership increases. Regulated legal persons will normally only be approved to take majority control where — in addition to the above conditions — the resulting group would be subject to effective consolidated supervision in accordance with relevant international standards; and the home supervisor of the parent entity has agreed to the proposed acquisition, as well as to the sharing of relevant prudential information for supervisory purposes (expressed, if necessary, through the signing of a Memorandum of Understanding between the CBB and the home supervisor, setting out their respective supervisory responsibilities).October 2010GR-5.3.5
In assessing the suitability of
controllers who are legal persons, CBB has regard to their financial standing, judicial and regulatory record, and standards of business practice and reputation, including, but not limited to, the following:(a) The financial strength of thecontroller , its parent(s) and other members of its group, its implications for thelicensee and the likely stability of thecontroller's shareholding;(b) Whether thecontroller or members of its group has ever entered into any arrangement with creditors in relation to the inability to pay due debts;(c) Thecontroller's jurisdiction of incorporation, location of Head Office, group structure, and the implications for thelicensee as regards effective supervision of thelicensee and potential conflicts of interest;(d) Thecontroller's (and other group members') propriety and general standards of business conduct, including the contravention of any laws or regulations, or the institution of disciplinary proceedings by a government authority, regulatory agency or professional body;(e) Any adverse finding in a civil action by any court or competent jurisdiction, relating to fraud, misfeasance or other misconduct;(f) Any criminal actions instigated against thecontroller or other members of its group, whether or not this resulted in an adverse finding;(g) The extent to which thecontroller or other members of its group have been truthful and open with regulators and supervisors;(h) Whether the person has ever been refused a license, authorisation, registration or other authority;(i) The person's track record as acontroller or investor in financial institutions;(j) The legitimate interests ofcustomers , creditors andshareholders of thelicensee ;(k) Whether their approval as acontroller is or could be detrimental to Bahrain's financial sector; and(l) Whether the person is able to deal with existingshareholders and the Board in a constructive manner.October 2010GR-5.3.6
The CBB may contact references and supervisory bodies in connection with any information provided to support an application for
controller . The CBB may also ask for further information, in addition to that provided in the Form 2, if required to satisfy itself as to the suitability of the applicant.October 2010GR-5.4 GR-5.4 Approval Process
GR-5.4.1
Within 3 months of receipt of an approval request under Paragraph GR-5.1.1, the CBB will issue a written notice of approval (or of refusal, if it is not satisfied that the person concerned is suitable to become a
controller of thelicensee) . The notice of refusal will specify the reasons for the objection and specify the applicant's right of appeal. Where an approval notice is given, it will specify the period for which it is valid and any conditions that may be applied.October 2010GR-5.4.2
Article 53 allows the CBB up to 3 months in which to respond to an application, although the CBB normally aims to respond within 30 calendar days. Notices of refusal have to be approved by an Executive Director of the CBB. The applicant has 30 calendar days from the date of a notice in which to appeal a decision to refuse the application or any conditions imposed as a condition of approval. The CBB then has 30 calendar days from the date of the appeal in which to consider any mitigating evidence submitted and make a final determination. See Module EN (Enforcement).
October 2010GR-5.4.3
Where a person has become a
controller by virtue of their shareholding in contravention of Paragraph GR-5.1.1, or a notice of refusal has been served on them under Paragraph GR-5.4.1 and the period of appeal has expired, the CBB may, by notice in writing served on the person concerned, instruct the person concerned to transfer such shares, or refrain from exercising voting rights in respect of such shares.October 2010GR-5.4.4
If the person concerned fails to take the action specified under Paragraph GR-5.4.3, then the CBB may seek a court order to take appropriate measures: these may include forcing the person to sell their shares.
October 2010GR-5.4.5
The powers available to the CBB that are described in Paragraphs GR-5.4.3 and GR-5.4.4 are specified in Article 56 of the CBB Law.
October 2010GR-5.4.6
In addition to the above requirements,
licensees are encouraged to notify the CBB as soon as they become aware of events that are likely to lead to major changes in theircontrollers . Any supervisory implications of such changes can then be discussed prior to the filing of a formal approval request.October 2010GR-6 GR-6 Cessation of Business
GR-6.1 GR-6.1 CBB Approval
GR-6.1.1
As specified in Article 50 of the CBB Law, a
licensee wishing to cease to provide or suspend all or any of its licensed regulated services, completely or at any of its branches, must obtain prior written approval from the CBB.Amended: April 2012
October 2010GR-6.1.2
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 requirements 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 thelicensee proposes to cease business;(d) Notice of an Extraordinary 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 thelicensee (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 thelicensee will stop its operations;(h) If thelicensee wishes to cease its whole business, confirmation that thelicensee will not enter into new business with effect from the cut-off date;(i) Once the CBB has given its approval to an application to cease business, thelicensee must publish a notice of its intention to cease business in two local daily newspapers (one in Arabic, the other in English). Notices must also be displayed in the premises (including any branch offices) of thelicensee concerned. These notices must be given not less than 30 calendar days before the cessation is to take effect, and must include such information as the CBB may specify;(j) The audited accounts of thelicensee as of the last date on which it stopped operations. The commencement of such accounts should be the beginning of the financial year of thelicensee ; and(m) The final liquidator's report of thelicensee. October 2010GR-6.1.3
Licensees intending to apply to cease business are advised to contact the CBB at the earliest possible 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 documentation specified in Paragraph GR-6.1.2 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.October 2010GR-6.1.4
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.
October 2010GR-6.1.5
The notice referred to in Subparagraph GR-6.1.2 (i) must include a statement that written representations concerning the liquidation may be submitted to the CBB before a specified day, which shall not be later than thirty calendar days after the day of the first publication of the notice. The CBB will not decide on the application until after considering any representations made to the CBB before the specified day.
Amended: April 2012
October 2010GR-6.1.6
Upon satisfactorily meeting the requirements set out in GR-6.1.2, the
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 and Commerce.Amended: April 2020
Added: October 2010GR-6.1.7
Where the CBB has given its approval to cancel or amend a license, then it will also publish its decision in the Official Gazette, as well as in two local daily newspapers (one in Arabic, the other in English), once this decision has been implemented.
Amended: April 2012
October 2010GR-6.1.7A
The publication cost of the notices referred to in Paragraph GR-6.1.7 is to be met by the
licensee concerned.Added: April 2012
GR-6.1.8
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.October 2010GR-6.1.9
A
licensee in liquidation must continue to meet its contractual and regulatory obligations to customers and creditors.October 2010GR-6.1.9A
If no objections to the liquidation are upheld by the CBB, the CBB may then issue a written notice of approval for the surrender of the license.
Added: April 2012
GR-6.1.10
If a
licensee applies to the CBB for voluntary surrender of its authorisation, it must ensure that suitable arrangements are in place for insurance coverage, to continue in respect of any unreported claims arising from past transactions, in accordance with Rule GR-7.1.7.October 2010GR-6.1.11
Upon satisfactorily meeting the requirements set out in GR-6.1.2, the
licensees 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 2016GR-7 GR-7 Insurance Coverage
GR-7.1 GR-7.1 Insurance Coverage Requirements
GR-7.1.1
Licensees are required to maintain the following insurance coverage at all times:(a)Money in transit insurance;(b)Fire, theft and other perils; and(c)Fidelity.October 2010GR-7.1.2
A
licensee is encouraged to assess its insurance needs, through professional advice, to ensure its adequacy to the level of business undertaken.Amended: January 2011
October 2010GR-7.1.3
The insurance coverage must be obtained from an insurance firm acceptable to the CBB and licensed in the Kingdom of Bahrain.
October 2010GR-7.1.4
Licensees must submit an Insurance Coverage Return (Form ICR) on an annual basis, within 3 months of the end of the financial year. Additionally, they must provide, upon request, evidence to the CBB of the coverage in force.Amended: October 2014
October 2010GR-7.1.5
In accordance with Paragraph EN-B.3.1,
licensees may not enter into or make a claim under a contract of insurance that is intended to, or has the effect of, indemnifying them from the financial penalties provided for in Module EN.October 2010GR-7.1.6
The requirement to maintain insurance coverage will normally be met by the
licensee concerned obtaining an insurance policy from an insurance firm. The CBB may also accept an insurance policy issued at group level, e.g. issued with respect to the parent of thelicensee , provided the terms of the policy explicitly provide coverage with respect to thelicensee .October 2010GR-7.1.7
Unless otherwise agreed in writing with the CBB, the policy must contain a clause that it may not be cancelled or lapsed without the prior approval of the CBB. The policy must also contain a provision for an automatic extended reporting period in the event that the policy is cancelled or lapsed, such that claims relating to the period during which the policy was in force may subsequently still be reported.
October 2010GR-7.1.8
As provided for in Module ES, insurance coverage requirements must be met by
licensees which were licensed prior to the introduction of Volume 5 (SpecialisedLicensees ) in October 2010, by June 2011.Licensees licensed after October 2010 are required to comply with the CBB's professional indemnity coverage requirements, from the point they are given a license.October 2010GR-8 GR-8 Display of License and Exchange Rates
GR-8.1 GR-8.1 Display of License and Exchange Rates
GR-8.1.1
Licensees must display the license granted to them by the CBB, and declare the exchange rates applied by them in a prominent position in their premises, including all of their branches.October 2010GR-9 GR-9 Security Measures
GR-9.1 GR-9.1 Security Measures for Money Changers
GR-9.1.1
Licensees must apply the following security measures as a minimum:October 2010GR-9.1.2
External Measures
(a) All offices must be located in heavy customer traffic areas, e.g. souqs. Not all malls may be considered heavy traffic areas. No branches should operate in isolated areas.(b) Main entrance doors must be protected by a grill type steel rolling shutter during off hours.(c) Branch alarm systems should have the following features:(1) PIR Motion detectors;(2) External audible siren or visible alarm. The choice of whether to use an audible alarm is left to thelicensees concerned; and(3) The intrusion detection system must be linked to thelicensee's (i.e. head office) monitoring unit.Amended: July 2011
October 2010GR-9.1.3
Internal Measures
(a) Teller counters must be fully screened off from customers by glass screens. Cash should not be directly exchanged through screens. Special purpose trays (i.e. half-rounded trays) should be fitted for the exchange of cash;(b) Access to teller areas must be restricted to authorised staff only;(c) Front doors to teller areas must be eliminated as much as possible. When used, they must be full length, solid, secure and kept locked at all times; and(d) Customers dealing with Branch Managers should not enter or pass through teller areas to get to the Branch Manager's office.Amended: July 2011
October 2010Teller Area
GR-9.1.4
Panic alarm systems for staff handling cash may be installed. The choice between silent or audible panic alarms is left to individual
licensees . Kick bars and/or hold up buttons may be spread throughout the teller and customer service areas and the branch manager's office.Amended: July 2011
October 2010GR-9.1.5
Cash Safety
(a) Cash must be kept in safes up to international standards and preferably secured to a solid floor;(b) All property in vaults and safes must be under the joint custody of two people;(c) Safes should be located out of the sight of customers wherever possible; and(d) Insurance coverage must be maintained in accordance with Section GR-7.1.Amended: July 2011
October 2010GR-9.1.5A
All cash movements between branches, or to and from banks should be performed by a special purpose vehicle.
Added: July 2011GR-9.1.6
CCTV Network Systems
(a) All branches must have CCTV cameras in place. The following locations are recommended:(1) Customer areas (hall, reception etc);(2) Teller areas (cameras located at the rear of tellers); and(3) Vault entrance/area; and(b) Notices of CCTV cameras in operation must be put up for the attention of the public. CCTV records must be maintained for a minimum of 30 days. The CCTV system must be operational 24 hours per day.Amended: July 2011
October 2010GR-9.1.7
Formal Security Training
(a)Licensees must establish the position of security manager. Forlicensees with three or more branches, this position must be a formally identified position. Forlicensees with one or two branches, the responsibilities of this position may be added to the duties of a member of management. This person will be responsible for ensuring that all staff are given annual, comprehensive security training. Training should form part of the induction program for new staff. Training should be given to all staff when new security measures are introduced; and(b)Licensees should produce a security manual or procedures for staff, especially those dealing directly with customers.Amended: July 2011
October 2010GR-9.1.8
Other Issues
(a) Opening and closing procedures must be put in place for those responsible for opening and closing the premises; and(b) Rotation of tellers must be implemented on a regular basis.Amended: July 2011
October 2010GR-9.1.9
The security manager must maintain records on documented security related complaints by customers and take corrective action or make recommendations for action on a timely basis. Actions and recommendations must also be documented.
Added: July 2011GR-9.1.10
Licensees must consider safety and security issues when selecting premises for new branches. Key security issues include prominence of location (i.e. is the branch on a main street or a back street?), accessibility for emergency services, and assessment of surrounding premises (in terms of their safety or vulnerability), and the number of entrances to the branch. Alllicensees are required to hold an insurance blanket bond (which includes theft of cash in its cover).Added: July 2011GR-10 GR-10 Measures to Detect Counterfeit Currency
GR-10.1 GR-10.1 Measures to Detect Counterfeit Currency
GR-10.1.1
Licensees are required to apply the measures in this Section to detect counterfeit currency:October 2010GR-10.1.2
Licensees must have in place counterfeit detection machines that comply with the following requirements:
(a) The detection machines must be used to verify the validity of all Bahraini currency submitted tolicensees (including any branch);(b)Licensees should have a suitable number of machines at each outlet to handle the volume of banknotes they ordinarily receive. Every outlet must have at least one such detection machine.(c) A teller (or any other person who accepts cash from the public) must check the validity of all the banknotes he receives on a detection machine.Licensees should ensure that tellers have been given adequate training in receiving banknotes and are familiar with the security features of Bahraini notes; and(d)Licensees should endeavour to have detection machines that employ state-of-the-art detection technology. What constitutes 'state-of-the-art detection technology' shall be left for the determination oflicensees , but the management of suchlicensees must apply their judgement as to the suitability of the technology they are employing and be prepared to justify their choices to the CBB upon request.October 2010Reporting
GR-10.1.3
When a
licensee discovers a counterfeit note (or what appears to be an item intended to be passed-off as a lawful banknote of the Kingdom) it should remit the same to the Currency Issue Directorate at the CBB, together with a report as required in Rules BR-1.5.14 and BR-1.5.15.October 2010GR-10.1.4
When a
licensee discovers a counterfeit note of a foreign currency, it should remit the same to Director of the Compliance Directorate at the CBB and copied to the Director of the Financial Intelligence Unit at the Ministry of Interior, together with a report as required in Rules BR-1.5.14 and BR-1.5.15.October 2010GR-10.1.5
Licensees are reminded that inadvertent receipt of counterfeit currency remains their responsibility and their liability alone. The CBB has no obligation to give value for any counterfeit currency.October 2010GR-11 GR-11 Credit Facilities Extended to Related Parties
GR-11.1 GR-11.1 Credit Facilities Extended to Related Parties
GR-11.1.1
Licensees are prohibited from extending credit facilities to proprietors, partners and shareholders of the business.Amended: January 2013
October 2010GR-11.1.1A
Credit facilities include but are not limited to loans and shari'a compliant financing facilities.
Added: January 2013GR-11.1.2
Credit facilities may be extended to employees of the
licensee , other than proprietors, partners and shareholders of the business.Amended: January 2013
October 2010GR-11.1.3
Licensees must obtain the CBB's prior written approval for any credit facility in excess of BD15,000, extended to the employees of the business.Amended: January 2013
October 2010GR-11.1.4
Licensees must obtain the CBB's prior written approval before writing-off any credit facility extended to the employees of the business.Amended: January 2013
October 2010