Bahrain seizes Iranian bank, insurer
The Central Bank of Bahrain (CBB) says it has placed two Iranian financial institutions into administration.
Bahrain’s media say this came into effect as of April 30, 2015. However, no explanation has been provided for the decision.
The targeted Iranian enterprises are the Future Bank and the Iran Insurance Company. The CBB has announced in a statement that it will assume the role of the administrators of the two “to safeguard and protect the rights of depositors and policyholders,” reported the Bahrain Mirror on its website.
The decision has been based on the Central Bank of Bahrain and Financial Institutions Law (Decree No. 64 of 2006), the report adds.
The Bank further emphasized that it wishes "to reassure both the local and International financial community that this measure is an isolated incident and will not impact any other bank or insurance company”.
"Indeed Bahrain's banking and insurance sectors remain sound, well-capitalized, well-regulated and continue to develop and grow with confidence," the CBB said in its statement.
Based on the CBB Law, the Administrator shall have all the powers necessary for the management and running the business of the entity that has been put under administration and is technically called “the Licensee”.
Accordingly, the CBB in the case of the Future Bank and the Iran Insurance Company will have the power to continue or to temporary suspend their operations, the power to suspend or limit the discharge of their financial obligations, and the power to conclude deals on behalf of them.
The Future Bank says on its website that it was established in 2004 through a joint venture between Bank Saderat Iran, Bank Melli Iran, and Ahli United Bank (AUB) Bahrain. Iran’s media reports say Valiollah Seif, the current governor of the Central Bank of Iran, was the head of the Future Bank in Bahrain before he returned to Iran in 2010.
Iran Insurance Company in Bahrain is an offshoot of a major Tehran-based insurer that has a network of branches in Iran and paid-up capital of $236 million.
Based on Bahrain’s laws, the Future Bank and Iran Insurance Company can appeal to the decision to put them under CBB administration within 10 days. They can also challenge the decision of administration before a competent court within 30 days. In absence of a legal action to resolve the case, the laws envisage a period of two years for the compulsory liquidation of the companies that have been put under administration or otherwise to terminate the administration.
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