Bahrain – Bank loan installments will not be postponed beyond June 30, the Central Bank of Bahrain (CBB) has announced.
MPs were quick to voice their concerns over the move and urged Cabinet to act urgently to overturn the decision.
The CBB followed the recommendations of the Bahrain Banking Association, it said in a circular signed by CBB Deputy Governor Shaikh Salman bin Isa Al Khalifa and addressed to all retail banks.
“The CBB takes note of and accepts the recommendation of the Bahrain Banking Association to end the installment deferral program by June 30, 2022,” the circular said yesterday.
“The CBB continues to urge all licensees, to whom this circular is addressed, to assess customer needs for rescheduling or restructuring of existing facilities. “We take this opportunity to reiterate our appreciation for your cooperation and assistance over the past two years. “If you have any questions about the above requirements, please do not hesitate to contact your supervisory point of contact at CBB.
In April, Parliament unanimously approved a proposal to defer all bank loan disbursements until the end of the year for Bahrainis and local businesses and returned it to Cabinet.
The loans were initially deferred in 2020, from March to August, without bank charges. They were postponed four more times under optional agreements in which interest was calculated from August 2020 to June this year.
Twenty lawmakers, led by Bahrainization Commission chairman Ebrahim Al Nefaei, hope the government will consider intervening with many family budgets that are set to face a triple whammy in the coming weeks.
“Eid Al Adha is just days away, followed by back-to-school and Ashura shopping – all of which involve heavy spending, but it looks like our markets will be hit hard this time around,” he said. said Mr. Al Nefaei. “What is more important – people unable to meet their financial commitments due to the damage caused by Covid-19 and risking a prison sentence, or a recommendation from already wealthy banks? “A lot of people have been calling saying that if this goes ahead they won’t be able to go out on Eid Al Adha because their basic bills will drain all their monthly salaries. “A rescheduling, or restructuring, of loans is an option that could be explored after another six-month extension, until the end of this year, but not now that everyone needs all the threads they have on. can get their hands on.” In April, MPs also unanimously approved extending bank loan installments to 15 years to help people cope with a return of monthly deductions. They want to more than double the maximum number of repayment years from seven to 15.
Loans and credit facilities increased by 5.7% in Bahrain to BD 11.3 billion ($30.05 billion) at the end of May 2022 compared to the level at the end of May 2021, signaling an increase in l economic activity, the GDN reported on Monday.
The business sector accounted for 46.2 pc of total outstanding loans, while the share of personal loans was 49.5 pc.
A statement from the CBB, after its board meeting on Sunday, said the key indicators are consistent with the return of activity in all economic sectors in the kingdom and demonstrate the stability of the financial sector and its ability to serve the national economy.
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