The Central Bank of Bahrain (CBB) has directed all banks and finance companies to extend the repayment of loan installments for a further six months, beginning in January 2021.
The proposal is part of the series of government measures to reduce the risk of coronavirus pandemic. The Central Bank indicated that all consumers residing in the Kingdom, including individuals or businesses, must be given the option of postponing payments, with the exception of sums due on credit cards and loans transferred to the court, unless there is coordination with the court.
“Licensees must offer their customers six-month installments deferment options, starting from January 1, 2021. The said option must entail extending the tenor to take into account the additional profit or interest while keeping the installment amount unchanged,” the Central Bank of Bahrain said in its circular to banks.
During the early stages of the coronavirus pandemic earlier in March, Bahraini nationals were given the option to delay the payment of bank loans by six months. At that time, the exemption also included credit cards but did not involve inter-bank deposits or borrowings.
According to the previous reports, any consumer who wishes to take advantage of a delay period of fewer than 6 months or who does not wish to take advantage of a deferral service must notify the lending institution with which he deals.
In March, Bahrain had also announced an $11.39 billion (4.3 billion Bahraini Dinar) financial package to tackle the coronavirus outbreak fallout. This included the measures covering electricity and water payments for individuals and companies for three months.