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) announced the launch of a loan deferral and liquidity support program, including a set of measures to support Bahrain's economy and the financial sector.
According to Bahrain News Agency, 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. The deferral option is applicable to both individuals and corporates, allowing these institutions the flexibility to postpone the classification of loans for affected customers. The total value of domestic loans stands at BHD11.3 billion.
For a period of six months, the CBB will provide retail banks with unlimited Bahraini dinar liquidity against eligible collateral, currently amounting to BHD 7.0 billion. Additionally, the repo facility will be extended to three months, and 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 decreased from 100% to 80%, which is expected to release additional liquidity into the 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.