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.
- Notification on SME Financing (PDF)
- Notification on Module LM (PDF)
- Proposed Module LM: Volume 1 (PDF)
- Proposed Module LM: Volume 2 (PDF)
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
Previous ArticleFDIC Clarifies RPP Reporting Solutions to be Voluntary for Banks
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.