Our cooperation with TKBB will be greatly beneficial to the Islamic banking processes and projects of both countries.
Finance is one of the most important sectors in Bahrain. The industry constitutes over 65% of the total workforce in the country and, of course, contributes greatly to the gross domestic product (GDP) of the country. And this reveals the key position of the sector in the country’s growth.
Organisational Structure of the Bahrain Association of Banks
Bahrain Association of Banks was founded in 1979 with a ministerial decree. The association brought together all kinds of banking institutions in the Kingdom of Bahrain with the aim of strengthening Bahrain’s image as the financial centre of the Middle East. We currently have a board of 13 members and an advisory board consisting of retired CEOs.
BAB has a small executive team since it receives help from external sources in areas such as information technologies, legal, and R&D. We perform our tasks with 11 different sectoral committees in areas such as cybersecurity, anti-money laundering, sustainable development, risk, products, and legal.
Islamic Finance Ecosystem of Bahrain
Bahrain is the world leader in Islamic finance at the moment. We also rank the 1st in MENA (Middle East North Africa) and 2nd in the world for the development of Islamic finance (ICD, 2019-Islamic Corporation for the Development of the Private Sector, IsDB subsidiary Institution, 2019) Bahrain became an example in the Islamic banking sector with the Bahrain Islamic Bank founded in 1979. From then on, we’ve been developing and improving the concepts, rules, and standards of Sharia compliance in Islamic banking. Besides, our Kingdom can now easily answer the needs of FinTech entrepreneurs who offer both mainstream Islamic finance and sharia-compliant products.
Bahrain Hosts Significant Islamic Finance Institutions
Bahrain’s focus on innovation and customer service makes it the first address for the development of Islamic finance. With 15 wholesale and 6 retail Islamic banks, the Kingdom has the biggest number of Islamic finance institutions in its region and a very powerful ecosystem. In addition, the Kingdom also hosts many significant institutions such as the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), International Islamic Financial Market (IIFM), and Islamic International Rating Agency (IIRA).
And Bahrain’s expertise spans every Islamic financing area, from asset management and Sukuk issuance to Sharia-compliant insurance and reinsurance. Central Bank of Bahrain (CBB) plays a crucial role in promoting the innovative products of the sector.
An Agreement Will Be Signed with Participation Banks Association of Turkey
We signed a memorandum of understanding with the Banks Association of Turkey (TBB) to strengthen our cooperation, encourage mutual investments, and benefit from each other’s experience and knowledge in the finance and banking world. We will soon sign the same memorandum with the Participation Banks Association of Turkey (TKBB). Our cooperation with TKBB will be greatly beneficial to the Islamic banking processes and projects of both countries.
As the Bahrain Association of Banks, we had an online meeting with TKBB on September 21, 2020. We talked about the current developments in the sector and discussed possible cooperation areas. And we decided to sign a memorandum of understanding in order to conduct joint projects and share our knowledge in strategic cooperation areas.
Important Developments Are Taking Place in FinTech in Bahrain
As part of the initiatives for digital transformation and the developments in digital financial services and in order to provide a regulatory framework that encourages innovation, CBB established a Fintech & Innovation Unit to ensure that the best services are provided to individual and corporate customers in the financial services sector. CBB’s other initiatives include introducing a Regulatory Sandbox that will allow start-ups, FinTech companies, and licensees to provide innovative banking and financial solutions, and issuing crowdfunding regulations both for conventional and Sharia-compliant services.
Dr. Waheed Al Qassim, CEO at the Bahrain Association of Banks