Regulatory Alerts2014-05-06
Prior Approval Required for Dismissal of Persons in Control Functions
The Central Bank of Bahrain (CBB) mandates that conventional and Islamic bank licensees secure prior written approval before dismissing or suspending personnel within designated control functions, including internal audit, risk management, AML, compliance, and Shari’a review. Incorporating industry feedback, the finalized rule extends this approval requirement to all staff in these departments rather than limiting it to senior heads, while establishing a ten-day response window that treats CBB silence as consent and permits immediate suspensions. This regulatory amendment strengthens corporate governance by preserving the Board’s dismissal authority and protecting employee independence, while ensuring banks maintain operational flexibility to address performance issues or policy breaches without undue regulatory delay.