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Bahrain - Legislation governing electronic banking and financial transactions in Bahrain will undergo an overhaul, the GDN has learnt.
Parliament and the Shura Council are currently reviewing existing legislation that deal with electronic cheques, receipts and cash transactions to ensure they conform to new practices and standards.
Experts are set to be called in by the financial and economic affairs committees in both chambers to help draw up security, protection measures and safeguard databases and procedures.
“The dynamics of things today as governed by the Central Bank of Bahrain (CBB) or even regular practices are more sophisticated and sensitive than all the legislation introduced in this country over the past four decades,” Parliament financial and economic affairs committee chairman Ahmed Al Salloom told the GDN.
“It doesn’t mean that the country’s financial deals and transactions are being done through an antiquated system or are vulnerable to security attacks – it is just that things needs to be looked into with the future in view,” he said.
“The country has a strong foundation and the evidence is that we are a leader in Islamic banking besides being a financial hub for many banks and this comes through legislative flexibility.
“But legislative flexibility can take the country only up to a certain point, and not apply for when everything goes fully electronic, including cheques, receipts and money flow.”
He said security concerns remain a worry, but international experts could help draw up necessary legislation to counter that.
“Electronic cheques and receipts could contain forged signatures or be completely made up, but that’s possible even on paper,” said Mr Al Salloom, who is also a Bahrain Chamber of Commerce and Industry (BCCI) board member and Bahrain Parliamentary Bloc president.
“There are concerns over hacking, cyber theft and cyber crime, but these again underline the need for expert intervention.”
Shura financial and economic affairs committee vice-chairman and top economic analyst Redha Faraj told the GDN that electronic financial transactions have gained in popularity this year due to the Covid-19 pandemic.
“There is a huge interest in electronic banking as people are finding it easier, flexible and reliable – and that shows that the country is advanced,” he said.
“However, several points need to be clarified: Do the cheques constitute actual payment or guarantees; does a scanned copy constitute a financial receipt; is a disclaimer email enough?
“Cash transactions’ traceability and follow-up remain another issue of security – is it money laundering, illegal or something else.”
The National Assembly, Parliament and the Shura Council, convene for the third term next month.
The GDN reported yesterday that the CBB, in co-operation with the Benefit Company, launched a coding service for operating the encryption feature for contactless payment for smartphones.
The feature allows payments to be made digitally via point-of-sale devices using a smartphone.
On August 3, the GDN quoted Industry, Commerce and Tourism Minister Zayed Alzayani as saying that Bahrain is expected to have a whole new e-commerce ecosystem before the end of the year.
The national strategy for online buying and selling, currently in the works, would include new legislation to regulate e-commerce.
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