Bahrain Banking: Regulatory Framework

Jamal Ali Al-Hazeem, CEO of BMI Bank, shares his views on the latest banking regulations in Bahrain. Specifically, he discusses the recent classification of the systematically important banks, FATCA, credit bureau, and Basel III accords.

According to Al-Hazeem, ” The Central Bank of Bahrain is doing a very good job. I’ve been working with the Central Bank in different capacities for the last 33 years. They have been doing a very good job, especially the Governor. I think he’s very focused and very conscious of the challenges facing the industry, and I think he is aware of the regulations that need to be established within the industry in order to protect and regulate the industry. The only concern I have personally as a banker and an economist in this country is you don’t want to be over-regulated in any industry because that will defeat the objective of having something like the financial sector in Bahrain.”

As for the Corporate Credit Reference Bureau, Al-Hazeem sees this as the positive development, “Corporate Credit Reference Bureau is a positive step towards improving the practices and business within the banking industry because that has been proven by the Consumer Credit Bureau. We are fully supportive of that and I think we have contributed as much as we could to the success of this Corporate Credit Bureau. So that’s a positive step forward because then at least each bank can have a history of the corporation and its credit track record.”

However, regarding FATCA, Al-Hazeem is critical. He says, “As far as FATCA is concerned, I wish the GCC had taken a unified approach to this issue instead of leaving each bank to take a single approach. It’s a big exercise and a big mandate and I think it needed a collective, consolidated effort and approach toward this issue – similar to what the EU has done. Unfortunately in Bahrain, the government regulator decided that each bank should address this issue separately. I don’t think in my own view that this was the right decision to make. I wish we had taken a consolidated approach as a country and as an industry towards this issue. That requires a lot of investment. It has huge liability if you don’t comply.”