Regulatory Alerts2017-06-29
Proposed Amendment to Module LR: Minimum Capital Requirement
The Central Bank of Bahrain proposes amendments to Module LR requiring foreign retail banks in the Kingdom to maintain a minimum capital of BD 20 million, inclusive of reserves and retained earnings, within five years ending December 31, 2021. Industry participants argue the fixed threshold is challenging for mid-sized and niche branches, recommending flexible compliance timelines, alternative capital classifications like dotation capital, and the retention of earnings in both BHD and USD. The regulator maintains that the requirement aligns with GCC regulatory harmonization and Basel III standards, while committing to regular assessments of branch capital levels.
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