Central Bank of Bahrain

Oversight of Payment and Settlement Systems

The CBB plays a strategic role in policy making, regulating and oversight of payment and settlement systems (fund transfer and securities). The objective of oversight is to promote safety, reliability and efficiency of the operation of PSS. Accordingly, the oversight of PSS is particularly aimed at containing systemic risks in PSS (the core requirement for maintaining financial system stability of the country) and promoting efficiency and fairness of PSS to meet growing needs of the economy. The oversight activities of the CBB are also aimed at promoting technological & institutional development of PSS and improving payment instruments to ensure public confidence.

The CBB conducts oversight on both large value and low value PSS (whether owned/operated by the CBB or any other party) as well as payment instruments. Oversight activities include formulating policies, establishing standards, offsite monitoring, carrying out assessments and enforcement of regulations.

The intensity of oversight will vary depending on whether the particular PSS is systemically important or not.

Under the CBB Law, the CBB is empowered to regulate financial services. Accordingly the CBB is the sole overseer and supervisor of PSS. It has powers issue regulations to payment service providers and participants to ensure that they operate in compliance with sound principles.

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