Bahrain Central Bank Issues Guidelines on Customer Due Diligence for Islamic Banks
Enhancing Customer Due Diligence Requirements for Islamic Banks in Bahrain
The Central Bank of Bahrain has issued new guidelines aimed at enhancing the customer due diligence requirements for Islamic banks operating in the country. The guidelines are designed to ensure that Islamic bank licensees maintain high standards of customer due diligence and compliance with anti-money laundering and counter-terrorist financing regulations.
Required Information from Customers
According to the guidelines, Islamic bank licensees must obtain and record specific information from original identification documents, databases or websites to identify customers and take reasonable measures to verify their identity, legal existence, and structure. The required information includes:
- Entity’s full name
- Registration number
- Legal form and proof of existence
- Registered address
- Trading address (if applicable)
- Type of business activity
- Date and place of incorporation or establishment
- Telephone, fax number, and email address
- Regulatory body or listing body
- Names of senior management personnel
- Name of external auditor (if applicable)
- Type of account
- Nature and volume of anticipated business dealings with the Islamic bank licensee
Verification Process
The guidelines also require Islamic banks to verify this information by obtaining certified copies of relevant documents, including:
- Certificates of incorporation
- Memorandum of association
- Articles of association
- Partnership agreements
- Board resolutions seeking banking services
- Identification documentation of authorized signatories
- Financial reports and accounts
Identifying Beneficial Owners
For customers that are legal persons, Islamic bank licensees must identify and take reasonable measures to verify the identity of beneficial owners through information such as:
- Identity of natural persons with controlling ownership interests
- Their relationship to the legal person
- Any other relevant information
Assessing Money Laundering/Terrorist Financing Risk Profile
The guidelines also emphasize the importance of obtaining audited financial statements or unaudited financial statements in order to assess the money laundering/terrorist financing risk profile of legal persons.
Effective Date and Compliance Requirement
The guidelines will come into effect on [insert date] and all Islamic bank licensees are required to comply with them. The new guidelines aim to ensure that Islamic banks operating in Bahrain maintain high standards of customer due diligence and compliance with anti-money laundering and counter-terrorist financing regulations.
Conclusion
“The new guidelines aim to ensure that Islamic banks operating in Bahrain maintain high standards of customer due diligence and compliance with anti-money laundering and counter-terrorist financing regulations,” said a spokesperson for the Central Bank of Bahrain.