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Location: Central Bank of Bahrain Volume 1—Conventional Banks > Part A > Enforcement & Redress > EN Enforcement > EN-5 Adverse "Fit and Proper" Findings
  • EN-5 Adverse "Fit and Proper" Findings

    • EN-5.1 Requirements for Individuals

      • EN-5.1.1

        Article 65 of the CBB Law, allows the CBB to determine the level of qualifications, experience, and training of a bank's board members, officers or employees.

        Added: October 2007

      • EN-5.1.2

        In addition, Chapter LR-1A specifies that all persons wishing to hold or holding the position of Director, Chief Executive/General Manager or Manager in a licensee must be assessed by the CBB as "fit and proper" to hold such a position. The Chapter specifies various factors that the CBB takes into account when reaching such a decision.

        Amended: October 2010
        Added: October 2007

      • EN-5.1.3

        Any Director, manager or official responsible for the direction or management of a licensee, is to be considered removed from office should he be convicted by a court for a crime affecting his honesty; is declared bankrupt by a court; or if a court rules that his legal capacity is totally or partially impaired.

        Added: October 2007

      • EN-5.1.4

        In interpreting the term "manager", the CBB uses the definition given in Chapter LR-1A. The same definition applies when the term "manager" is used in other Modules, unless a different definition is explicitly provided for in the Module concerned.

        Amended: October 2010
        Added: October 2007

    • EN-5.2 CBB Policy

      • EN-5.2.1

        The CBB is conscious of the impact that assessing someone as not "fit and proper" may have on an individual. Such assessments are carefully reviewed in the light of all relevant facts. The criteria used in reaching a decision include the following:

        (a) The extent to which the factors set out in Chapter LR-1A have not been met;
        (b) The extent to which the person has deliberately or recklessly breached requirements of the CBB Law or Volume 1 (Conventional Banks);
        (c) The person's past compliance record and conduct following any such contravention;
        (d) The length of time since factors indicating a lack of fitness or propriety occurred; and
        (e) The risk the person poses to licensees and their customers.
        Amended: October 2010
        Added: October 2007

      • EN-5.2.2

        In assessing evidence, the CBB applies a lower threshold than is applied in a criminal court of law, reflecting generally, the administrative nature of the sanction. The CBB may also take into account the cumulative effect of factors which, when considered individually, may not in themselves be sufficient to justify an adverse "fit and proper" finding.

        Amended: July 2018
        Amended: October 2010
        Added: October 2007

      • EN-5.2.3

        The CBB may also take into account the particular function being undertaken in the licensee by the individual concerned, and the size and nature of the licensee itself, particularly when assessing the suitability of a person's experience or qualifications. Thus, the fact that a person was deemed "fit and proper" for a particular position in a particular firm does not necessarily mean he would be suitable in a different position or in a different firm.

        Amended: October 2010
        Added: October 2007

      • EN-5.2.4

        The CBB may carry out re-assessment tests in case of individuals deemed to be responsible for serious or repeated violations. See Appendix A.

        Added: July 2018

    • EN-5.3 Procedure for Issuing an Adverse Finding

      • EN-5.3.1

        All proposals for issuing an adverse "fit and proper" finding are subject to a thorough review by the CBB of all relevant facts, assessed against the criteria outlined in Section EN-5.2. In some instances, it may be appropriate for the CBB to request the licensee or person concerned to provide further information, in order to help reach a decision.

        Amended: October 2010
        Added: October 2007

      • EN-5.3.2

        All adverse findings have to be approved by an Executive Director of the CBB. A notice of intent is issued to the person concerned, and copied to the Board/senior management of the licensee as appropriate, setting out the circumstances and the basis for the CBB's proposed adverse finding. The person has 30 calendar days from the date of the notice in which to make written representations, addressed to the Executive Director concerned, failing which a final notice is issued by the CBB.

        Amended: October 2010
        Added: October 2007

      • EN-5.3.3

        If representations are made, then the CBB has 30 calendar days from the date of the representation in which to consider any mitigating evidence submitted and make a final determination.

        Amended: October 2010
        Added: October 2007

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