Her comments come within a fortnight of RBI saying it will allow differentiated banks like custodian and wholesale banks
. The RBI has already issued in-principle licences to 10 payments banks and 11 small finance banks.
The strong capitalisation of most retail and wholesale banks
provides significant loss-absorption capacity, and most of the retail banks have sound liquidity profiles.
"We have been very clear over the years that the primary responsibility for supporting the wholesale banks
resides with their shareholders - that was our clear expectation, for example, with TIBC and Awal," Rasheed Al Maraj said.
Singapore has allowed three Japanese banks to expand their operations in the city-state by upgrading them from offshore to wholesale banks
as part of its move to liberalize the banking industry, the Monetary Authority of Singapore (MAS) said Tuesday.
Following the de-risking of the balance sheets of the two major Bahraini wholesale banks
, Arab Banking Corporation ('BBB+'/stable) and Gulf International Bank ('A'/stable) last year, Fitch also expects these to be modestly profitable this year.
represented 77.4pc of this sheet, while retail banks accounted for the remaining 22.6pc.
"Circumstances that could lead to a systemic crisis include: the failure of one of the larger wholesale banks
to which several Bahraini banks could be exposed; or (ii) the failure of one or more wholesale banks
because of risky real estate exposures that could lead to a crisis in confidence, which would in turn also affect retail banks with less risky exposures to the sector," explained Chrysaphinis.
The consolidated balance sheet of the banking system in Bahrain, comprised of retail banks and wholesale banks
, increased by $23.3bn (10.5pc) to reach $245.8bn at end-December last year, compared with $222.5bn at end-September last year and compared with end-December 2006, the consolidated balance sheet of the banking system increased by 31.2pc.
Bahrain's wholesale banking industry has grown significantly over the past two years, with the consolidated assets of wholesale banks
amounting to $177.2 billion in August last year, an increase of over 20 per cent over the same period in 2006.
The Financial Supervisory Commission has proposed raising the working capital requirement for each foreign retail bank's branch to TWD250m (USD7.7m) and for each foreign wholesale bank
's branch to TWD200m, up from TWD150m.
As such, Bankers Trust has been evaluated as a "wholesale bank
" under the Board's CRA regulations.(18) Deutsche Bank proposes to continue to operate Bankers Trust as a wholesale bank
and to maintain the CRA policies of Bankers Trust.