Manama: The Kingdom of Bahrain’s financial sector has became one of the largest contributors to the national economy, approximately 17% of the GDP in the second quarter of 2014, and the number of financial institutions licensed reached 404, including banks, insurance companies, investment companies, and other ancillary financial services.
“Over the years, the Central Bank of Bahrain (CBB) established a system of legislation and practices that contributed effectively to the development of the financial sector to keep pace with the global developments and maintain its competitiveness, this in turn contributed to the growth of the national economy, particularly through the development of banking and insurance services and investment services,” Abdul Rahman Al Baker, Executive Director of Financial Institutions Supervision, Central Bank of Bahrain (CBB) told the participants of Invest in Bahrain Forum and Exhibition 2014 held at the Bahrain International Exhibition Centre (BIEC).
The opening ceremony of the Forum was held in the presence of Royal Highness Shaikh Mohammed bin Mubarak Al Khalifa, the Deputy Prime Minister, Dr. Hassan bin Abdullah Fakhroo, Minister of Industry and Commerce
Held under the patronage of His Royal Highness Prince Khalifa bin Salman Al Khalifa, the Prime Minister for his patronage of the Invest in Bahrain – Forum and Exhibition 2014 and valued presence of His Highness the Deputy Prime Minister on behalf of his Royal Highness for the opening of this annual event organized by the Ministry of Industry and Commerce.
The Forum reflects on HRH Premier’s keenness to follow-up on high-level economic events which showcase and contribute investment opportunities in the Kingdom of Bahrain.
“The pioneering role and leadership of the Government led by the Prime Minister, His Royal Highness Prince Khalifa bin Salman Al Khalifa, in establishing rules and a solid foundation for the financial sector initiated since the beginning of the 70’s. His highness’ support continued for the betterment and growth of this sector which transformed it to the largest contributing sector of the Bahraini economy.
“The economic policy of the Government of Bahrain since the beginning of the 70’s was to encourage investment, the freedom to ownership, and to boost the private sector. This policy helped establish a diverse and open economy and contributed to the financial services sector and effectively in the promotion of economic activity since the last century.
The law and policies governing the workings of the financial sector rely heavily on keeping in line with best practices and complying with international banking standards and all regulatory regimes related to insurance and other financial services.
“At the forefront was the CBB’s commitment to implement international standards and systems in the field of legislation and supervision of financial services while maintaining a legislative and regulatory business – friendly environment and commitment to best international practices and standards in this area,” he said.
“Due to Bahrain’s early adoption of Islamic banks and providing the appropriate legislative environment and technical assistance for their growth and success , in addition to the presence of institutions that support them, such as the AAOIFI – Accounting and Auditing Organization for Islamic Financial Institutions and IIFM – International Islamic Financial Market, both of which have chosen Bahrain as their hub, Bahrain has proudly become a regional and global Islamic finance hub hosting 26 Islamic banks in addition to 8 Takaful and Re-Takaful companies in addition to nearly 92 Islamic investment funds.
In addition, the number of employees in the financial sector in Bahrain is more than 14000 workers with 67% of them being Bahraini nationals.
The CBB works in close cooperation with local and foreign licensed institutions in order to provide the appropriate setting for the development of financial products, particularly at the level of the Islamic banking industry.
“The Central Bank of Bahrain developed Rulebooks, consisting of seven volumes which cover conventional banking, Islamic banking, insurance, asset management, ancillary financial services, capital markets, and mutual funds, in order to offer the appropriate regulatory framework for the financial institutions of all kinds.
“This legislative framework has paved the way for asset management companies, Rulebook volume 4, to license several asset management companies and investment, which have reached 53 licensed companies until the end of September 2014, ranging in their activities between providing comprehensive management of assets to brokerage services and investment consultancy; with their assets under management reaching US$ 17 billion.
Also, contributing to the new legislative framework for investment funds, which was issued under volume 7 Rulebook to create an environment suitable for various types of investment in assets, where the number of investment funds established and registered in Bahrain, reached more than 2,800 investment funds until the end of September 2014, with a total assets value of $7 billion.
“The Kingdom of Bahrain’s interest in creating a favorable environment for inward investment has been a longstanding strategy, which is not only based on the existence of a growing financial sector, but also a successful and competitive one.
“We are proud that the financial sector is considered one of the Kingdom’s outstanding achievements and represents a fundamental pillar in strengthening the flourishing investment climate in Bahrain thus raising its competitive edge.”