The Central Bank of Bahrain issued a circular including instructions to postpone the repayments of all loans. According to Bahrain’s state-run news agency, the decision was taken in order to strengthen the efforts to cope with the economic challenges caused by COVID-19.
In the circular issued by the Central Bank, all retail banks and finance companies have been instructed to provide the option of postponing loan repayments. The option of deferring loan repayments could be applied until December 31, 2021. The statement indicated that all individuals and companies could benefit from this option.
The circular also includes some regulations regarding under which circumstances the postponement option would be applied. According to these provisions, apart from the interest rate that the credit institution initially applied, any additional deferral fees cannot be implemented. However, the interest rate that was initially agreed on will continue to accrue on the postponed loans during the deferral period.
On the other hand, individuals or companies that would like to utilize this option would not face any increase in the amount of installments or increase in the interest or profit rate.
Highlighting that the decision taken by the Central Bank would contribute to coping with the economic repercussions of the pandemic, the head of the Central Bank, Rasheed Al Maraj, stated that the decision was taken upon consultation and coordination with the banking and financial sector.
The tiny Gulf country has decided to take additional measurements to fight against the spread of the disease over the increase in the number of COVID-19 cases. According to the latest measures, shopping malls, restaurants, and coffee shops are closed as part of a two-week lockdown. Additionally, events and conferences are banned during the same period.