Business Continuity Planning Requirements for CBB-Regulated Entities During Regional Tensions
Recent geopolitical developments, including escalating tensions involving Iran and the wider Gulf region, have heightened concerns around operational resilience and security risks for financial institutions. In such an environment, banks operating in Bahrain must ensure that their business continuity and operational risk frameworks remain robust and capable of responding to potential disruptions, including cyber threats, infrastructure disruptions, or wider regional instability arising from geopolitical tensions.
The Central Bank of Bahrain (CBB) Rulebook requires banks to maintain comprehensive Business Continuity Management (BCM) frameworks and Business Continuity Plans (BCPs) to ensure operational resilience in the event of disruptions.
What you need to know
Business continuity planning is mandatory
A BCP is expected to address several operational areas, including:
- data backup and recovery, including both electronic and physical records
- continuation of critical systems and operations
- operational and financial impact assessments
- alternative communication channels with employees, customers and counterparties
- alternative physical locations for employees and operations
- communication and reporting to the CBB and other regulators
- ensuring customers maintain prompt access to their funds in the event of disruption
The purpose of a BCP is to minimise operational, financial, legal and reputational risks arising from business disruptions, and to ensure that banks can continue to serve customers and financial markets during periods of crisis
Governance and management responsibility
The Board of Directors and senior management are responsible for overseeing business continuity arrangements and ensuring that BCM frameworks and BCPs are regularly reviewed, tested and updated.
Practical considerations for financial institutions
Periods of heightened regional uncertainty can place additional pressure on operational infrastructure and third-party service providers. Financial institutions may therefore wish to review whether existing BCM frameworks adequately address potential disruption scenarios.
In particular, banks may wish to consider:
- reviewing BCM frameworks and BCPs to ensure alignment with the CBB Rulebook
- confirming escalation and regulatory reporting procedures in the event of operational disruption
- assessing dependencies on outsourced services or cloud infrastructure
- ensuring outsourcing and technology agreements clearly address business continuity and disaster recovery obligations.
How we can help
ASAR advises financial institutions on regulatory interpretation and compliance obligations relating to operational risk management and BCM frameworks. Our services include:
- advising boards and senior management on governance and oversight obligations
- conducting legal and regulatory reviews of existing BCPs to ensure alignment with the CBB Rulebook
- identifying gaps between internal policies and CBB regulatory requirements
- reviewing outsourcing agreements and cloud service contracts to ensure BCM and disaster recovery obligations are clearly defined and contractually enforceable.
For further information, please contact ASAR Bahrain at asarbh@asarlegal.com
