The Central Bank of Bahrain (CBB) has launched a comprehensive loan deferral and liquidity support program, following the directives of His Royal Highness Prince Salman bin Hamad Al Khalifa, the Crown Prince and Prime Minister of the Kingdom of Bahrain.
This initiative includes a range of measures aimed at strengthening Bahrain’s economy and supporting the stability of the financial sector.
Retail banks and financing companies will offer customers the option to defer loan installments and credit card payments, including principal and interest, for three months, with the deferral option applicable to both individuals and corporates. These institutions will have the flexibility to postpone the classification of loans for affected customers, with the total value of domestic loans at $29 billion (BHD 11.3 billion).
For a period of six months, the CBB will provide retail banks with unlimited Bahraini dinar liquidity against eligible collateral of $18 billion (currently BHD 7.0 billion).
In addition, the repo facility will be extended to three months. Reserve requirements will be reduced from 5.0 percent to 3.5 percent. The minimum Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) will be reduced from 100 percent to 80 percent, which should release additional liquidity into the economy sectors.
CBB’s Commitment to Financial Stability
The CBB affirmed that Bahrain’s financial sector continues to operate smoothly, with the banking sector maintaining strong capital adequacy and liquidity levels. The CBB will continue to monitor developments closely and stands ready to take further measures as needed to safeguard monetary and financial stability and ensure the continuity and sustainability of financial services across Bahrain.
