“The process of consultation aims at seeking feedback from the industry to ensure that due consideration is given to various queries and issues raised and thereby translating international standards to take into account the banking industry in Bahrain,” Khalid Hamad, Executive Director, Banking Supervision, said.
“The consultation process ensures that the CBB has a transparent regulatory process, and all consultations are publicly available on its website (www.cbb.gov.bh) along with feedback statements reflecting industry comments and the CBB’s reply or actions taken in light of the comments received.”
CBB has undertaken consultations and discussions with the industry on three regulatory initiatives for licensed banks operating in the Kingdom of Bahrain. These consultations have now been finalised and have been or will soon be released and include the following new module on training and competency (TC). In accordance with Article 65 of the CBB Law, the CBB has issued requirements that have to be met by banks with respect to training and competency of individuals undertaking controlled functions, as defined in the CBB Rulebook. These requirements, included in Module TC and released as part of the October 2013 update, provide Rules and Guidance for banks to ensure satisfactory levels of competence, in terms of an individual’s knowledge, skills, experience and professional qualifications. Banks are required to demonstrate that individuals undertaking controlled functions are sufficiently competent, and are able to undertake their respective roles and responsibilities.
In line with the international standards dictated by the Basel Committee on Banking Supervision (BCBS), as well as regulatory requirements implemented in various jurisdictions, the CBB undertook a consultation process on sound remuneration practices for licensed banks. Following discussions and feedback from the banks, the consultative documents were amended and have now been finalised and distributed to the banks and posted on the CBB website. The CBB will allow for a transition period until the end of June 2014 for the implementation of these new rules.
The BCBS issued in June 2012 a final document dealing with the internal audit function in banks. The CBB subsequently issued for consultation its internal audit rules in line with the BCBS document, recognising the importance of a strong internal audit function within banks. The new rules take into account developments in supervisory practices in banking organisations and incorporate lessons learned from the financial crisis. The internal audit rules will soon be issued as part of the January 2014 update to the CBB Rulebook, reflecting the feedback received from the industry.