Featured Product

    CBB Consults on Liquidity Risk Module and SME Financing Requirements

    March 25, 2021

    CBB proposed requirements on financing for small and medium-size enterprises (SMEs), the consultation period for which ends on April 01, 2021. As part of this consultation, CBB proposed to require all retail banks to ensure (incrementally), by December 31, 2025, that financing for SMEs accounts for at least 20% of their domestic financing portfolio and to create a separate department or unit that is dedicated to SME financing. CBB also launched a consultation to amend the liquidity risk management module (Module LM) of the Rulebook for both conventional (Volume 1) and Islamic (Volume 2) banks; the comment period for this consultation ends on April 22, 2021.

    With respect to the enhancement of liquidity risk requirements, CBB proposed to introduce a new chapter on "Loan to Deposit Ratio" within Module LM of the CBB Rulebook Volume 1 for conventional retail bank licensees. Conventional retail bank licensees must ensure that their loan-to-deposit ratio does not exceed 75% percent at all times. Bahraini conventional retail bank licensees must compute the ratios on a “solo” basis and on a “consolidated” basis. Branches of foreign banks must compute this ratio for the Bahrain operations (that is, on a “branch level” basis). The ratios must be computed using the month end balances. If a breach of the loan-to-deposit ratio is observed due to unexpected withdrawals of nonbank deposits, the conventional retail bank licensee must notify CBB immediately and present a plan within 14 calendar days describing the measures it will take to restore the LTD ratio to be within 75%. Conventional retail bank licensees must report their loan-to-deposit ratios on a quarterly basis in their PIR reports. 

    With respect to Rulebook Volume 2 for Islamic retail bank licensees, CBB proposed to introduce, to Module LM, a chapter on "Financing to URIA and Current Account Ratio." These banks must ensure that their financing to Unrestricted Investment Account (URIA) and current account (FTUCA) ratio does not exceed 75% at all times. Bahraini Islamic retail bank licensees must compute the ratios on a “solo” basis and on a “consolidated” basis. Branches of foreign banks must compute this ratio for the Bahrain operations. The ratios must be computed using the month-end balances. If a breach of the FTUCA ratio is observed due to unexpected withdrawals of URIAs and current accounts, the Islamic retail bank licensee must notify CBB immediately and present a plan within 14 calendar days describing the measures it will take to restore FTUCA ratio to be within 75%. Islamic retail bank licensees must report their FTUCA ratios on a quarterly basis in their PIRI reports.

     

    Related Links

    Comment Due Date: April 22, 2021 (Module LM)/April 01, 2021 (SME Financing)

    Keywords: Middle East and Africa, Bahrain, Banking, Islamic Banking, Module LM, Liquidity Risk, Loan-to-Deposit Ratio, ALM, Basel, Reporting, SME Financing, CBB

    Featured Experts
    Related Articles
    News

    BoE Seeks Information Before Migrating Statistical Reporting to BEEDS

    The Bank of England (BoE) published the Statistical Notice 2021/09 requiring additional information from firms and software vendors to assist in the onboarding and testing phases for migrating statistical reporting to the BEEDS portal.

    October 25, 2021 WebPage Regulatory News
    News

    CFRF Publishes Guides to Manage Financial Risks from Climate Change

    The working groups of the Climate Financial Risk Forum (CFRF) published a second round of guides (or Session 2 guides), written by the industry for the industry, to help financial firms manage climate-related financial risks.

    October 21, 2021 WebPage Regulatory News
    News

    EBA Updates Filing Rules for Supervisory Reporting

    The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    ECB Amends Guideline on Procedures for Collection of AnaCredit Data

    The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.

    October 19, 2021 WebPage Regulatory News
    News

    EBA Publishes Standards on Disclosure of Investment Policy Under IFR

    The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).

    October 19, 2021 WebPage Regulatory News
    News

    EC Sets Out Work Program for 2022

    The European Commission (EC) adopted the work program for 2022.

    October 19, 2021 WebPage Regulatory News
    News

    APRA Finalizes Guidance for New Prudential Standard on Remuneration

    The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.

    October 18, 2021 WebPage Regulatory News
    News

    ESAs Report on Supervisory Independence of Competent Authorities

    The European Supervisory Authorities (ESAs) published individual reports on the supervisory independence of competent authorities in their respective sectors.

    October 18, 2021 WebPage Regulatory News
    News

    FED Updates FR Y-9C Form and Instructions, Proposes to Extend FR 2510

    The Board of Governors of the Federal Reserve System (FED) updated reporting form and instructions, along with the associated supplemental instructions, for the information collection on consolidated financial statements for holding companies (FR Y-9C).

    October 18, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7589