Regulatory Alerts2017-05-20
Methodology for Calculating Financial Penalties
The Central Bank of Bahrain (CBB) establishes a standardized methodology for calculating financial penalties imposed on licensees under Law 64 of 2006, ensuring penalties encourage compliance and reduce sector risk. Fine amounts are primarily benchmarked against the licensee’s gain, benefit, or cost avoidance from a violation, subject to a BD 100,000 cap and mandatory full customer compensation. When gains are unquantifiable, the CBB applies a three-tier risk rating table to determine fines ranging from BD 1,000 to BD 100,000, while doubling penalties for repeated violations and retaining discretion to reassess approved persons.
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