Regulatory Alerts2021-08-04
Circular dated August 4, 2021 regarding regulatory instructions regulating dormant accounts
In summary, the Central Bank of Bahrain (CBB) has issued new guidelines to local banks regarding the management and reduction of non-performing loans (NPLs). These measures include regular reviews of borrowers' financial standing, mandatory inspections for borrowers with high delinquency rates, and an increase in the provisioning rate for NPLs. Banks must also report monthly to the CBB on all outstanding loans and employees on leave. The Central Bank has provided a grace period of six months from the date of issuance of these guidelines. Additionally, banks must ensure that they are complying with the minimum standards of customer due diligence when opening accounts. Finally, the CBB will review the performance of each bank annually to assess whether their NPL reduction efforts are effective.