30 March 2004
Manama. Bahrain: The Bahrain Monetary Agency (BMA) has launched a consultation on proposed procedures for the enforcement of its regulations.
The proposed enforcement procedures spell out existing and new powers of the BMA as well as provide guidelines on how BMA will apply these powers on licensees for failing to comply with regulatory requirements.
“The broad aim of the proposed rules on enforcement is to encourage a higher level of compliance by banks,” said Dr Khalid Abdulla Ateeq, Executive Director, Banking Supervision, at the BMA.
“This will promote financial stability of the system and reinforce Bahrain’s reputation as an international financial center of excellence.”
The current consultation relates to BMA powers derived from the BMA Law, promulgated by Amiri Decree No 23 of 1973, and applies to all BMA licensees, except insurance companies. A separate consultation regarding enforcement procedures for insurance licensees will be issued in April 2004.
Enforcement actions at BMA’s disposal include formal notices (or warnings), directives, fines (both automatic and discretionary), investigations, assumption of administration of a bank and licence cancellation.
A highlight of the proposals is the introduction of money fines for late or inaccurate reporting by banks and an expanded list of violations, which can attract fines.
“Existing regulation provides for fines only for money laundering-related issues,” said Dr Ateeq.
“Under the proposed rules, fines may be levied in several new areas, including failure by an institution to respond to BMA’s requests for information.”
On money laundering-related issues, separate fines have been specified for failure to comply with individual requirements. For example, failure to keep customer records for five years would incur a fine of BD10,000, while failure to appoint a Money Laundering Reporting Officer (MLRO) would incur a penalty of BD15,000.
Dr Ateeq stressed that BMA continues to favour an open, pragmatic and collaborative relationship with its licensees. However, effective supervision requires effective enforcement of BMA requirements.
“Nonetheless, except when automatic fines apply, BMA will consistently assess the individual circumstance of each contravention before deciding its regulatory response,” he said.
The current consultation period runs until 29th April 2004. The consultation paper is available on the BMA website at www.bma.gov.bh
“We welcome comments from the industry and other interested parties, including auditors, advisors and law firms, to the proposals detailed in the consultation paper,” said Dr Ateeq.
The consultation is part of an ongoing review of existing regulation to ensure that regulation, applied by the BMA, continues to adhere to the highest international standards.
Consultations are also ongoing in the area of consumer finance and high-level controls.
-Ends-
Bahrain Monetary Agency (BMA)
Contact: Indira Chand/Rima Al Kilani
Tel: (973) 17547522/17547609
E-mail: media@bma.gov.bh
Website: www.bma.gov.bh
Manama. Bahrain: The Bahrain Monetary Agency (BMA) has launched a consultation on proposed procedures for the enforcement of its regulations.
The proposed enforcement procedures spell out existing and new powers of the BMA as well as provide guidelines on how BMA will apply these powers on licensees for failing to comply with regulatory requirements.
“The broad aim of the proposed rules on enforcement is to encourage a higher level of compliance by banks,” said Dr Khalid Abdulla Ateeq, Executive Director, Banking Supervision, at the BMA.
“This will promote financial stability of the system and reinforce Bahrain’s reputation as an international financial center of excellence.”
The current consultation relates to BMA powers derived from the BMA Law, promulgated by Amiri Decree No 23 of 1973, and applies to all BMA licensees, except insurance companies. A separate consultation regarding enforcement procedures for insurance licensees will be issued in April 2004.
Enforcement actions at BMA’s disposal include formal notices (or warnings), directives, fines (both automatic and discretionary), investigations, assumption of administration of a bank and licence cancellation.
A highlight of the proposals is the introduction of money fines for late or inaccurate reporting by banks and an expanded list of violations, which can attract fines.
“Existing regulation provides for fines only for money laundering-related issues,” said Dr Ateeq.
“Under the proposed rules, fines may be levied in several new areas, including failure by an institution to respond to BMA’s requests for information.”
On money laundering-related issues, separate fines have been specified for failure to comply with individual requirements. For example, failure to keep customer records for five years would incur a fine of BD10,000, while failure to appoint a Money Laundering Reporting Officer (MLRO) would incur a penalty of BD15,000.
Dr Ateeq stressed that BMA continues to favour an open, pragmatic and collaborative relationship with its licensees. However, effective supervision requires effective enforcement of BMA requirements.
“Nonetheless, except when automatic fines apply, BMA will consistently assess the individual circumstance of each contravention before deciding its regulatory response,” he said.
The current consultation period runs until 29th April 2004. The consultation paper is available on the BMA website at www.bma.gov.bh
“We welcome comments from the industry and other interested parties, including auditors, advisors and law firms, to the proposals detailed in the consultation paper,” said Dr Ateeq.
The consultation is part of an ongoing review of existing regulation to ensure that regulation, applied by the BMA, continues to adhere to the highest international standards.
Consultations are also ongoing in the area of consumer finance and high-level controls.
-Ends-
Bahrain Monetary Agency (BMA)
Contact: Indira Chand/Rima Al Kilani
Tel: (973) 17547522/17547609
E-mail: media@bma.gov.bh
Website: www.bma.gov.bh
© Press Release 2004
