Wednesday, July 6, 2022
ReportCBB adds digital finance providers to rulebook

CBB adds digital finance providers to rulebook

The Central Bank of Bahrain (CBB) has expanded the scope of financing models in its rulebook to include “new and innovative” consumer financing business models, paving the way for technology-mediated solutions including buy-now-pay-later (BNPL) platforms.

The amendments to the CBB Rulebook Volume 5 (Type 3: Financing Companies) are part of the regulator’s efforts to stay abreast with developments in the financial world, particularly in the fintech field.

Key changes to provisions concerning financing companies include:

  • Lowering restrictions on the ownership percentage of controllers;
  • Requiring an appropriate management structure to meet technology-based business models;
  • A capital based on the nature, scale and size of operations – a minimum BHD5 million (US$13.18 million) capital is not applicable as is the case for existing financing companies.

“I am pleased to announce the amendments to the CBB Rulebook to cover within its scope innovative business models using digital technology and platforms to provide small value consumer loans especially for medium and small enterprises and individuals. Consumers and small businesses are expected to benefit from such new business models,” said Shireen A Karim Al Sayed, the director of CBB’s regulatory policy unit.

This development bodes well for Islamic fintech solution providers which has seen a growth in BNPL platforms.

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