Established in the Kingdom of Bahrain since 1957, the National Bank of Bahrain B.S.C (NBB) has played a pivotal role in the country’s financial landscape. As a conventional retail bank licensed, regulated, and supervised by the Central Bank of Bahrain (CBB), NBB prioritizes compliance with anti-money laundering (AML) and terrorist financing regulations. In this blog post, we delve into the comprehensive measures adopted by NBB to ensure the integrity of the financial system and combat financial crime.
Compliance with Regulatory Framework:
The CBB mandates that all conventional banks in Bahrain adhere to the applicable laws, regulations, and implement robust AML programs. NBB fully complies with these requirements, establishing and maintaining effective systems and controls to mitigate the risks associated with financial crime. As a condition of its banking license, NBB diligently follows the legislation and regulations outlined in the Financial Crime Module of the CBB, including the Customer Due Diligence (CDD) rules recommended by the Basel Committee on Banking Supervision and FATF 40 recommendations.
Key AML Initiatives Implemented by NBB:
- Independent AML Department: NBB has established a dedicated AML Department responsible for overseeing the bank’s AML function. This department plays a crucial role in reporting suspicious transactions to the relevant authorities, ensuring swift action against potential money laundering activities.
- Robust Customer Identification Procedures: NBB strictly adheres to Know Your Customer (KYC) procedures during the establishment and ongoing relationship with customers. The bank emphasizes verifying customer identities, the source of funds, and maintaining comprehensive account transaction monitoring mechanisms. Suspicious transactions linked to money laundering or other unlawful activities are promptly reported to the appropriate local supervisory regulatory authority. Additionally, NBB implements enhanced due diligence (EDD) measures for customers categorized as higher risk, ensuring robust compliance systems and maintaining thorough records.
- Ongoing Account Monitoring: NBB prioritizes the monitoring of Politically Exposed Person (PEP) accounts to detect and mitigate potential risks associated with these individuals.
- Employee Training Programs: To foster a culture of awareness and vigilance, NBB conducts regular bank-wide training programs for employees. These programs educate staff members on recognizing suspicious activities, appropriate actions to be taken upon detection, and reporting mechanisms.
- Continuous Review and Updates: NBB remains proactive in adapting to changes in legislation and guidelines by regularly reviewing and updating its operating procedures. This ensures that the bank stays ahead in preventing the misuse of its products and services.
- Confidential Reporting: NBB ensures that its employees can report potential AML activities without fear of adverse reactions. Adequate procedures are in place to maintain confidentiality and protect the identity of employees involved in reporting.
- FATCA Compliance: National Bank of Bahrain B.S.C is fully compliant with the Foreign Account Tax Compliance Act (FATCA) regulations. It has been included in the first list of participating Foreign Financial Institutions (FFIs) on the IRS website.
- Rigorous Audits: To ensure adherence to AML and terrorist financing rules, NBB conducts regular internal and external audits. These audits serve as independent evaluations of the bank’s compliance efforts and procedures.
As a leading financial institution in Bahrain, NBB remains committed to upholding the highest standards of AML practices. By maintaining compliance with regulatory frameworks, implementing robust procedures, and fostering a culture of vigilance, NBB contributes to safeguarding the financial integrity of the country. The bank’s commitment to combating financial crime and staying ahead of evolving threats positions it as a trusted partner for customers seeking secure and compliant banking services in Bahrain.