2013-01-15

New Risk Management Module for Islamic Bank Licensees

The Central Bank of Bahrain has introduced a new Risk Management Module requiring Islamic bank licensees to adopt a comprehensive, enterprise-wide risk framework that covers credit, market, liquidity, equity, rate of return, and operational risks. The regulation mandates strict governance oversight, stress testing for unrestricted investment accounts, and clear counterparty limits while harmonizing terminology with IFSB 2005 guidance and preparing for Basel III standards. It further consolidates existing risk modules, clarifies mandatory versus suggestive rules, and establishes defined Sharia compliance protocols to ensure consistent risk ownership across all institutional levels.

Bahrain

Central Bank of Bahrain

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