Bahrain: fintech & payments regulation

Who regulates

• Central Bank of Bahrain (CBB)

  Primary supervisor for banks, payment service providers, financing companies, and ancillary service providers.

  ^{[1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22]}

• Capital Markets Authority of Bahrain (CMA)

  Regulator for Shari’ah-compliant financing-based crowdfunding platforms.

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Core laws & rules

• Law No. (23) of 2025 Amending Provisions of the Law of Commerce (2025)

  Provides the statutory basis for CBB draft resolutions regulating partial cheque payments, credit reporting, and other commercial financial services.

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• CBB Rulebook (Various Volumes) (Ongoing)

  The primary regulatory instrument containing modules for payment services, open banking, crowdfunding, trust services, and ancillary providers.

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• Regulation No. (1) of 2007 (2007)

  Regulates electronic transferable instruments and aligns with the e-Cheque Project.

• Shari'ah-Compliant Financing-Based Crowdfunding Regulations (2017)

  Establishes licensing and operational standards for Shari’ah-compliant crowdfunding platforms under CMA oversight.

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Licensing & registration

• Payment Service Providers (PSPs)

  Unified framework for PSPs, money changers, AISP/PISP, and crypto-asset licensees under the proposed Payment Services Requirements Module.

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• Retail and Wholesale Financial Institutions

  Proposed reduction in minimum initial paid-up capital for new applicants. Capital: BD 2 million (Retail), BD 250 thousand (Wholesale/Financing) Timeline: Proposed 2026-03-10

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• Financing Companies

  Licensing and capital adequacy modules finalized with specific core capital definitions.

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• Crowdfunding Platforms

  Authorization and market requirements for financing-based and equity crowdfunding, including Shari’ah-compliant models.

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• Ancillary Service Providers

  Includes third-party administrators, card processors, and credit reference bureaus under Volume 5.

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• Family Offices

  New licensing and operational requirements under Rulebook Volume 4.

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Restrictions & warnings

• Client money must be safeguarded and segregated according to specific standards under the General Requirements Module.

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• Retail banks must obtain direct regulatory approval for new or expanded products; white-labeling of licensed third-party providers for AISP/PISP is prohibited.

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• Multi-purpose prepaid cards issued by payment service providers are capped at BD 200 per individual account.

• Control thresholds of 10% or more in investment/insurance firms require prior CBB approval.

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Direction of travel

• The CBB is actively modernizing its framework to align with PSD2, introducing unified payment service rules and enhanced open banking authentication.

  ^[3][5]

• Regulatory sandbox remains available to foster fintech innovation through phased, flexible testing environments.

• Recent consultations indicate a trend toward reducing capital barriers for new entrants while strengthening high-level controls and compliance standards.

  ^[2][7]

Sources

1. CBB Draft Resolutions Pursuant to Law No. (23) of 2025 Amending Provisions of the Law of Commerce · 2026-06-01
2. Consultation on Proposed Revision to Initial Capital Requirements · 2026-03-10
3. Proposed Payment Service Requirements Module · 2026-03-05
4. Proposed Amendments to Resolution No. 33 of 2018 on Trustee Services Licensing and Conditions · 2024-10-20
5. Proposed Requirements for Open Banking Authentication, ASPSP Disclosures and AISP/PISP Reporting on API Performance Statistics · 2023-10-18
6. Family Office Module (FO) · 2023-08-21
7. Central Bank of Bahrain Consultation on Revised High-Level Controls Module (Module HC) · 2023-07-24
8. Client Money Requirements · 2022-10-16
9. Proposed Amendments to the Regulations Concerning Crowdfunding · 2022-03-08
10. Proposed Amendments to Open Banking Regulations · 2021-07-11
11. Proposed Amendments to Module AU – Volume 4 · 2020-10-14
12. Shari'ah-Compliant Financing-Based Crowdfunding Regulations for Bahrain · 2017-05-16
13. Proposed Changes to CBB Prior Approval Requirements for New or Expanded Financing Company Products · 2016-06-12
14. Proposed Changes to Section BC-4.7 for Volume 1 (BC-4.6 for Volume 2) Dealing with the CBB’s Prior Approval Requirements for New or Expanded Products · 2016-06-12
15. Consultation on Modules for Ancillary Service Providers (Volume 5) · 2016-03-15
16. Regulation Governing Control in Investment Business Firm and Insurance Licensees · 2015-06-22
17. Change in Due Date and Payment for CBB Annual Fees for CIUs and PIUs · 2013-07-21
18. Volume 5 Draft Common and Specific Modules (CA & GR) for Financing Companies Licensees · 2013-02-01
19. Financing Companies Licensees Draft Modules – Volume 5 Industry Comments and Feedback · 2013-02-01
20. Proposed Regulation on the Conditions of Granting a License for Regulated Services · 2011-09-01
21. CBB Volume 5 for Administrator Licensees (Specialised Licensees) · 2011-05-16
22. Volume 5 Draft Common and Specific Modules for Representative Office Licensees · 2010-12-01