Central Bank of Bahrain
The Central Bank of Bahrain, the Kingdom’s regulator, has implemented a comprehensive prudential and reporting framework, tailored for the specific concepts and needs of Islamic banking and insurance. One of the objectives of the Central Bank of Bahrain (CBB) is to provide effective central banking services to the Government and to the financial sector of the Kingdom. In the pursuit of this objective, the CBB undertakes a range of banking operations:
Payment and settlement systems operations
The CBB operates the national payment and settlement systems which enable payment of settlement between banks as well as the clearing and settlement of cheque, securities and ATM transactions.
Issuance of Government securities
The CBB is empowered to issue debt securities on behalf of the Government of the Kingdom of Bahrain.
Foreign exchange reserve management
The CBB has been assigned the task to manage the Government's reserve holdings of gold and foreign currency.
Currency issue
The CBB has the sole responsibility for the issuance of banknotes and coins in the Kingdom of Bahrain.
The CBB’s rulebook for Islamic banks covers areas such as licensing requirements, controllers requirements, capital adequacy, risk management, business & market conduct, financial crime and disclosure/reporting requirements, as well as reflecting the requirements and guidance related to the Basel II framework. Similarly, the insurance rulebook addresses the specific features of Takaful and re-Takaful firms.
Consistent with the declared strategy of developing the industry further, the CBB established a special fund to finance research, education and training in Islamic finance (the Waqf Fund). The CBB continues to remain active, working with the industry and stakeholders in developing industry standards and the standardization of market practices. The CBB works constructively with the Bahrain Institute of Banking and Finance (BIBF) and other prominent training providers to enhance and expand the knowledge and skills base of those with an interest in Islamic finance.
In addition to the numerous Islamic financial institutions, Bahrain also plays host to a number of organisations committed to the development of Islamic finance, including:
• The Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI)
• The International Islamic Financial Market (IIFM)
• The General Council for Islamic Banks and Financial Institutions
• The International Islamic Rating Agency