Question

Financial institutions in Bahrain are highly regulated and monitored by the CBB. In your own words, explain how the Central bank of bahrain applies regulatory and monitoring authority in order to manage the financial institutions in the Kingdom. For your answer, refer to the current situation that is taking place; explain how does and will the CBB help protect the economy of the Kingdom. (300 words)

Answer 1

Financial institutions of the gulf countries (Bahrain) take different regulation forms. Also, Bahrain is the only country that has opted for the unitary approach.

How CBB apply regulatory and monitoring authority?

The central bank of Bahrain (CBB) regulates both the conduct of financial services business within the country as well as the financial institutions that provide those services.

As per the article 40 of the 2006 law provides that no person may undertake a 'regulated service' in the kingdom of Bahrain unless a proper license is issued by the CBB.

The CBB rule book is divided into seven volumes. covering different fields and areas of financial activity. where volumes one and two covering conventional bank licensees of Islamic bank licensees. also, volumes three and four contain insurance and investment vis a vis.

Breach of a rule contains a variety of sanctions against the licensee under the CBB rule book. these ranges from lower-level a formal warning to extreme cases criminal proceedings.

CONCLUSION

As from the above-mentioned points, It is clear that breaching the law of the CBB is a heinous crime, and penalties are accordingly. so in today's world, the CBB is effective enough to regulate the economy of the country through various rules following the CBB rule book.

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