Deposit Protection Scheme

The current deposit protection scheme was established in July 1994, following the issuance of Prime Ministerial Resolution No. (3) of 1993.

The scheme is administered by a Board, comprising of 10 members, drawn respectively from the Central Bank (2 members, including the Chairman of the Deposit Protection Scheme Board), retail banks (4 members) and Government (4 members).

The scheme applies to all non-banking private sector deposits, denominated in Bahraini Dinars and other currencies, held with the Bahrain offices of all retail banks by residents and non-residents. Certain specific exclusions apply, such as deposits held by other retail institutions.

Eligible depositors are protected up to an amount which is the smaller of:

  • 75% of the combined total of eligible deposits held by a depositor, and
  • BD 15,000.

The total amount that the scheme may pay out in any calendar year is limited to BD 25 million, together with any unutilized portion of the preceding year’s amount and the entitlement of the succeeding year, i.e. limiting the Board’s financial resources to an absolute total of BD75 million at any one time.

Full details of the scheme are given in Modules CP, of Volumes 1 (conventional banks) and 2 (Islamic banks) of the CBB Rulebook.

Following the introduction of the Central Bank of Bahrain and Financial Institutions Law 2006 (‘CBB Law’), a new deposit protection scheme is now in the process of being finalized. The scheme is intended to be pre-funded, in contrast to the current scheme, which is post-funded.