Bahrain's central bank said on Tuesday it is taking steps to close down Iranian-owned Future Bank, which is based in the Gulf state.

On Monday, Ebtisam Al Arrayed, head of regulatory policy at the central bank, told Reuters that the regulator had yet to make a decision about Future Bank after placing it under its administration last year, along with Iran Insurance Co - the Bahrain branch of an Iranian insurer.

At that time the regulator said the moves were to "protect the rights of depositors and policyholders".

Calls to the two companies offices in Bahrain on Tuesday were not answered.

Future Bank, based in Manama, is a commercial bank which was founded as a joint venture between two Iranian banks - Bank Saderat and Bank Melli - and Bahrain's Ahli United Bank, according to its website.

The bank's assets stood at 569.4 million dinars ($1.51 billion) at the end of September 2015, according to the latest financial statement on the bank's website.

Bahrain's central bank has not elaborated on its reasons for the action, which has highlighted the risks to Iran's business interests from heightened political tensions in the Gulf.

Earlier this month Bahrain said it was cutting diplomatic ties with Iran, following its neighbour Saudi Arabia in severing ties with Tehran after Iranian protesters angered by the Sunni Muslim kingdom's decision to execute a leading Shi'ite cleric, attacked its mission there.-Reuters