The Central Bank of Bahrain (CBB) has initiated a loan deferral and liquidity support programme aimed at bolstering the economy and financial sector because of Iran war.
Retail banks and financing companies are set to offer customers the option to defer loan instalments and credit card payments, encompassing both principal and interest, for three months. This deferral option is available to both individuals and corporate entities.
Financial institutions will possess the flexibility to postpone the classification of loans for affected customers, with the total value of domestic loans standing at BHD 11.3B.
For a duration of six months, the CBB will provide retail banks with unlimited Bahraini dinar liquidity against eligible collateral, with current eligibility set at BHD 7.0B.
Reserve requirements will be reduced from 5.0% to 3.5%.
The minimum Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) will also decreased from 100% to 80%: measures expected to enhance liquidity within various economic sectors.
The CBB will closely monitor ongoing developments and remains prepared to implement further measures as necessary to protect monetary and financial stability while ensuring the continuity of financial services throughout Bahrain.
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