CBB Proposes and Finalizes Rulebook Modules for Banks in November 2018

The following proposals, with varying consultation periods have been published:

• Open Banking—Under Volume 5, CBB proposed a new Module OB, along with amendments to the existing rules on ancillary service providers (Module AU), general requirements (Module GR), and CBB reporting requirements (Module BR). Under Volumes 1 and 2, CBB proposed amendments to Module GR, Chapter 6 on Open Banking. Additionally, under Volumes 1, 2, and 5, CBB proposed amendments to the glossary of defined terms (Appendix). These proposals are based on practices of some of the leading financial centers and emphasis has been placed on high level of security and controls, as this initiative will lead to connecting banks, financing companies, card companies, and other licensees to institutions defined in the draft rules as account information services providers and payment initiation service providers that would use open application program interfaces (Open APIs) to obtain access to customers' accounts on the basis of customers providing consent for such access. The consultation on these proposals closes on November 25, 2018.

• Module FC for Volumes 1 to 6—CBB Rulebook Volumes 1 and 2 require all banks to submit a report on the quality of a licensee's anti-money laundering procedures, systems, and controls and compliance with the AML Law and Module FC. The report is to be submitted annually by the licensee's external auditor or a consultancy firm approved by CBB. CBB has noted that some of the reports that are prepared and submitted lack depth and/or consistency and reliability. As part of the objective to establish industry leading practices, CBB is proposing the introduction of a template for the preparation of such reports and the conduct of appropriate procedures to form the basis of such reports. For Volumes 1 and 2, CBB requests all licensees, audit firms, and interested parties to submit comments, including "nil" comments, by December 02, 2018. For Volumes 3, 4, 5, and 6, CBB requests comments by December 13, 2018.

• Requirements for PSPs—CBB proposed additions to the requirements in the Authorization Module (Module AU) under Section AU-1.2 and the General Requirements Module (Module GR) under a new Chapter GR-5B in the CBB Rulebook Volume 5 for Ancillary Service Providers; this is to accommodate for general issues and security measures for the PSPs that will have their own cash dispensing machines (CDMs) or kiosks to enable cash withdrawal, as part of the Wage Protection System. CBB requests all PSPs to provide comments, including "nil" comments, on the proposals by December 12, 2018.

Related Links 

• Circular on Leverage Ratio (PDF)
• Open Banking (PDF)
• Module FC Volumes 1 and 2 (PDF)
• Module FC Volume 5 (PDF)
• Module FC Volumes 3 to 6 (PDF)
• PSP Requirements (PDF)

Keywords: Middle East and Africa, Bahrain, Banking, PMI, Capital Adequacy, Leverage Ratio, Islamic Banking, AML, Payment Service Providers, Reporting, CBB