The Bahrain Monetary Agency (BMA) has introduced reforms to modernise and strengthen the licensing f...
The Bahrain Monetary Agency (BMA) has introduced reforms to modernise and strengthen the licensing framework for banks operating in the kingdom.
The reforms came into effect on 1 July and complete the BMA's drive for a clearer, more modern banking licensing regime.
Similar licensing reforms were implemented in the insurance industry in April 2005, while the investment business sectors came under scrutiny a year later. Rasheed Mohammed Al Maraj, governor of the BMA, said under the revised banking regulations all regulated banking activities were clearly defined, giving clarity and legal certainty for banking licensees and customers.
He added: "License categories are defined by regulated activity, rather than institution type, making the new framework flexible and inclusive and able to respond to market changes.
"A key feature of the revised framework for banks is the simplification of existing categories of onshore and offshore banking licenses, enabling offshore banks to undertake onshore business in a controlled manner."
Al Maraj said the BMA would monitor the impact of the new system closely during the coming months and has set a minimum transaction threshold to allow local banks time to adjust.
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