The Central Bank of Bahrain (CBB) has released a new set of rules specifically tailored for microfinance institutions.  

The rules for microfinance institutions are part of the Volume 5 of the CBB Rulebook, developed specifically for specialised licensees.  

The complete framework for microfinance institutions includes a series of common modules for all specialised licensees and nine specific modules for microfinance institutions.  

The initial launch of the specific microfinance modules include authorisation (AU), high-level controls/corporate governance (HC), general requirements (GR), capital adequacy and liquidity requirements (CA), business conduct (BC), CBB reporting (BR) and public disclosure (PD).

These modules will be supplemented in the future by risk management (RM) and training and competency (TC).

As part of the development of its regulatory framework, the CBB undertook a public consultation with the industry seeking feedback on its latest proposals for microfinance institutions.  

It further conducted research through onsite visits to the microfinance institutions currently licensed in Bahrain to gain insight into this financial activity and to ensure that any rules issued recognise the characteristics of this industry.  

Khalid Hamad, executive director, Banking Supervision, said: “Throughout the years, the CBB has conducted various consultations in line with the implementation of international standards, 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 financial services industry in Bahrain.  

“The consultation process ensures that the CBB has a transparent regulatory process, and all consultations are publicly available on its website along with feedback statements reflecting industry comments and the CBB’s reply or actions taken in light of the comments received.” - TradeArabia News Service