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Location: Central Bank of Bahrain Volume 1—Conventional Banks > Part A > High Level Standards > GR General Requirements > GR-4 Business Transfers
  • GR-4 Business Transfers

    • GR-4.1 CBB Approval

      • GR-4.1.1

        In accordance with the CBB Governor's Resolution No.(33) for the year 2012 issued pursuant to Article 66 of the CBB Law, a conventional bank licenseeG (transferorG ) must seek prior written approval from the CBB before transferring any regulated banking service to a person (transfereeG ), except in the following circumstances:

        (a) Where the transferred business is limited to the assets and/or liabilities of the transferorG and does not include any regulated banking servicesG ; or
        (b) Where the regulated service transferred accounts for less than 5% of the transferor'sG total assets and/or liabilities as recorded in the unconsolidated balance sheet of the financial quarter preceding the date of the transfer of business application.
        Added: October 2012

      • GR-4.1.2

        For purposes of Paragraph GR-4.1.1 (a), a business transfer refers to a transfer of the rights and obligations of one conventional bank licenseeG to a third party, so that the customers continue to be subject to the same terms and conditions as those originally agreed.

        Added: October 2012

      • GR-4.1.3

        In instances where Subparagraph GR-4.1.1(b) applies, conventional bank licenseesG must notify the CBB before transferring any regulated banking serviceG to a transfereeG one month prior to the transfer taking place.

        Added: October 2012

      • GR-4.1.4

        Rule GR-4.1.1 is intended to apply to circumstances where a bank wishes to transfer all or part of its business (examples: credit card business, asset management business) to a third party, or is undertaking winding up proceedings.

        Added: October 2012

      • GR-4.1.5

        In the case of a Bahraini conventional bank licenseeG , Chapter GR-4 applies to its assets and liabilities booked in Bahrain. In the case of an overseas conventional bank licenseeG , Chapter GR-4 applies only to assets and liabilities booked in the bank's Bahrain branch.

        Added: October 2012

    • GR-4.2 Procedure with Respect to Applications

      • GR-4.2.1

        Conventional bank licenseesG wishing to transfer banking business in the Kingdom must apply to the Executive Director of Banking Supervision by submitting an application form along with the supporting documents as specified by the CBB (see Part B, Supplementary Information, Appendix GR-1). Unless otherwise directed by the CBB, the application must provide:

        (a) Full details of the business to be transferred including a detailed list of all liabilities or assets that will be transferred;
        (b) The rationale for the proposed transfer;
        (c) If applicable, an assessment of the impact of the transfer on any customersG directly affected by the transfer, and any mitigating factors or measures;
        (d) If applicable, an assessment of the impact of the transfer on the transferor's remaining business and customersG ; and
        (e) Evidence that the proposed transfer has been duly authorised by the transferorG (such as a certified copy of a Board resolution approving the transfer).
        Added: October 2012

      • GR-4.2.2

        Banks intending to apply to transfer a regulated service are advised to contact the CBB at the earliest possible opportunity, in order that the CBB may determine the nature and level of any documentation and/or the need for an auditor or other expert opinion to be provided. The CBB will grant its permission where the transfer will have no negative impact on the financial soundness of the bank, and does not otherwise compromise the interests of the bank's depositors and creditors. In all cases, the CBB will only grant its permission where the institution acquiring the regulated service holds the appropriate regulatory approvals and is in good regulatory standing.

        Added: October 2012

      • Preliminary Assessment

        • GR-4.2.3

          The CBB will make a preliminary assessment of whether the proposed transfer is of a type that could be considered for approval or not based on the receipt of the documents referred to in Paragraph GR-4.2.1. If rejected, the applicant will be informed accordingly. The CBB will approve/reject the transfer of business application form after the submission of all necessary documents within 14 calendar days of the date where all documents have been submitted.

          Amended: January 2013
          Added: October 2012

      • Publication of the Transfer of Business Application

        • GR-4.2.4

          In instances where the CBB is in favor of the transfer requested, and in accordance with Article 66(c) of the CBB Law, the transfer of business application will be published by the CBB in the Official Gazette and in two daily newspapers in the Kingdom of Bahrain (one in Arabic and one in English). The CBB notice will include a statement that written representations concerning the transfer of business application may be sent to the CBB within three months from the date of publication.

          Added: October 2012

        • GR-4.2.5

          If the liabilities are located in a jurisdiction outside Bahrain, the CBB may also publish such notice in the jurisdiction in which the risk is situated.

          Added: October 2012

        • GR-4.2.6

          In all cases, the costs of publication of the notices referred to in Paragraphs GR-4.2.4 and GR-4.2.5 must be met by the transferorG .

          Amended: July 2017
          Added: October 2012

    • GR-4.3 Determination of Application

      • GR-4.3.1

        The CBB will consider an application under Paragraph GR-4.2.1 if it is satisfied that:

        (a) Any objections received to the application to transfer the business following its publication in the Official Gazette and in two daily newspapers in the Kingdom of Bahrain (one in Arabic and one in English) as required under Article 66(d) have been reviewed and resolved by the CBB;
        (b) Except in so far as the CBB has otherwise directed, a copy of the notice has been sent to every affected customer and every other person who claims an interest in an asset or liability included in the proposed transfer (and has given written notice of his claim to the transferorG );
        (c) Copies of a statement, approved by the CBB, setting out particulars of the transfer, have been available for inspection at one or more places in Bahrain for at least 30 days, from the date of publication of the notice specified in Paragraph GR-4.2.3; and
        (d) Where the proposed transfer includes any contract where the risk is situated in a jurisdiction other than Bahrain, a statement, approved by the CBB, setting out particulars of the transfer, has been available for inspection at one or more places in that jurisdiction for at least 30 days, starting with the date of publication of the notice specified in Paragraph GR-4.2.3.
        Added: October 2012

      • GR-4.3.2

        The CBB will not approve the transfer, under the terms of Paragraph GR-4.2.1, unless it is satisfied that:

        (a) The transfereeG is authorised to carry on regulated banking servicesG in Bahrain or (where relevant) is authorised or otherwise permitted to carry on regulated banking servicesG in the jurisdiction where any overseas risks are situated;
        (b) Every transaction or account or relationship included in the transfer evidences a contract which was entered into before the date of the application;
        (c) The transfereeG possesses the necessary solvency required by the regulatory authorities to which he is subject to, after taking the proposed transfer into account;
        (d) Where transactions, accounts, or customer relationships are being transferred from an overseas branchG of a bank licensee, or the transfereeG is an overseas conventional bank licenseeG , the relevant overseas regulatory authority has been consulted about the proposed transfer, the law of that jurisdiction provides for the possibility of such a transfer, and the relevant supervisory authority in that jurisdiction has agreed to the transfer;
        (e) The transfer will not breach any applicable laws and regulations, and will not create any supervisory concerns;
        (f) The business transferred is not prohibited by the CBB; and
        (g) There are no material adverse consequences from the transfer on the transfereeG or the security of customers and creditors and their rights and obligations are protected.
        Added: October 2012

      • GR-4.3.3

        In assessing the criteria outlined in Paragraph GR-4.3.2, the CBB will, amongst other factors, take into account the financial strength of the transfereeG ; its capacity to manage the business being transferred; its track record in complying with applicable regulatory requirements; and (where applicable) its track record in treating customersG fairly. The CBB will also take into account the impact of the transfer on the transferor, and any consequences this may have for the transferor's remaining customersG .

        Added: October 2012

      • GR-4.3.4

        The CBB will review the application and any other documents or information requested by the CBB taking into consideration any objections received and conditions stated in Article 66 (d) of the CBB law.

        Added: October 2012

      • GR-4.3.5

        The CBB reserves the right to impose additional requirements if, in the opinion of the CBB, additional requirements are necessary to protect customer interests. In all cases where additional requirements are imposed, the CBB shall state the reasons for doing so.

        Added: October 2012

      • GR-4.3.6

        The CBB will communicate its final decision to the transferorG within 5 working days of the expiry of the period for submitting objections to the CBB (see Paragraph GR-4.2.4).

        Added: October 2012

    • GR-4.4 CBB Decision

      • GR-4.4.1

        In accordance with Article 67 (d) of the CBB Law and Article 8 of the Regulation issued pursuant to Resolution No.(33) of 2012, the CBB's decision regarding the application for transfer made under Section GR-4.2, will be published as a notice in the Official Gazette and in two local newspapers (one in Arabic and one in English) and will come into effect from this date.

        Added: October 2012

      • GR-4.4.2

        If the liabilities are located in a jurisdiction outside Bahrain, the CBB may also publish such notice in the jurisdiction in which the risk is situated.

        Added: October 2012

      • GR-4.4.3

        The costs of publication of the notices referred to in Paragraphs GR-4.4.1 and GR-4.4.2 must be met by the transferorG .

        Added: October 2012

      • GR-4.4.4

        Article 67(e) of the CBB Law notes that where the application for business transfer has been turned down by the CBB or includes restrictions, the applicant may appeal to a competent court within 30 calendar days from the date of publication referred to in Paragraph GR-4.4.1 .

        Added: October 2012

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