MANAMA: Following the directives of His Royal Highness, Prince Salman bin Hamad Al Khalifa, the Crown Prince and Prime Minister, the Central Bank of Bahrain (CBB) has announced the launch of a loan deferral and liquidity support programme including a set of measures to support Bahrain’s economy and the financial sector.
Under this initiative, the CBB in a statement said, 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 BD11.3 billion.
For a period of six months, the CBB will provide retail banks unlimited Bahraini dinar liquidity against eligible collateral (currently BD 7 billion). In addition, the repo facility will be extended to three months. Reserve requirements will be reduced from 5.0% to 3.5%. The minimum Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) will be reduced from 100% to 80%, which should release additional liquidity into economic sectors.
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.
