The Central Bank of Bahrain (CBB) has clarified that no extra interest, profit or fees can be charged by lenders on the six-month consumer loan deferral, the GDN's business editor Avinash Saxena reported today.
The regulator issued fresh guidelines to banks, finance and microfinance companies yesterday to clarify its order on Monday.
The CBB order directed lenders to grant citizens a six-month waiver on loans without fees, interest-on-interest (compound interest) or increase in the profit or interest rate.
However, some banks and financing firms had sought a clarification as they interpreted the order to mean that they could continue to accrue interest on deferred loan instalments, and advised borrowers accordingly.
The order also bars banks and finance companies from taking new legal action in case of default by borrowers during the moratorium period from March 23 until September 30, 2020.
For credit cards, the required minimum monthly payment must be set to zero from March until August 2020, the CBB said.
The regulator has also said that offering the loan deferral to expatriates was up to the discretion of the lenders.
A GDN report last Thursday quoted CBB Governor Rasheed Al Maraj as saying that all banks and commercial financing companies are obliged to delay taking loan instalments for six months from Bahrainis.
He had said that the postponement would be from this month without any fees, charges or interest.
The waiver is in line with the royal directives of His Majesty King Hamad to unify all national efforts to avert the spread of the global outbreak of the Coronavirus Disease (Covid-19) in Bahrain and protect the health and safety of citizens and residents.
