MANAMA: Rasheed Mohammed Al Maraj, Governor, Central Bank of Bahrain has won the Middle East Central Bank Governor of the Year award for 2018.
The award underpins Bahrain’s tireless efforts in developing its regulatory environment for financial services coupled with a forward-looking approach towards adopting digital innovations and financial technology.
The progressive approach of the Central Bank of Bahrain (CBB) has helped to achieve the dominant place among the financial regulators despite the fact that Bahrain may not be the largest Financial Centre in the region but without doubt it is one of the most sophisticated amongst its peers.
Mr Al Maraj assumed the governorship in 2005 and under his leadership Bahrain has built on its already impressive credentials as a globally minded financial Centre. Beyond a growing economy and low inflation environment, over the past 18 months the CBB has pursued a number of eye-catching initiatives in the fintech sector.
These include the development of a dedicated regulatory sandbox for fintech start-ups, launched in June 2017. The framework offered by the CBB is a virtual space open to existing licensees, as well as new local and foreign firms. The testing phase is nine months with a maximum three-month extension.
Moreover, in October 2017 the CBB established a dedicated fintech unit. This body will oversee the approval process for participation in the sandbox, as well as offering supervision of licensed companies, operations and activities. The move falls under the CBB’s broader ambition of financial digital transformation in the country.
On the regulatory front, the introduction of protected cell companies, investment limited partnerships and a trusts law all bode well for Bahrain’s position as a key financial hub. Collectively, these changes will open up new opportunities for business and investment structures to be developed in the country. In addition, they bring Bahrain’s structuring options to the level of best international practices.
In December 2017, the CBB also issued a new directive recognising both locally domiciled and foreign exchange-traded funds (ETFs) as collective investment undertakings. It means banks and other financial institutions can list ETFs established in Bahrain on licensed exchanges, while also permitting the registration of offshore ETFs. Notably, the new directive recognises both conventional and sharia-compliant funds.