MPs Back Urgent Loan Deferral After Iranian Missile Strikes

TDT | Manama

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An urgent call to defer bank loan instalments for shop owners and companies affected by Iran’s attacks won Parliament’s backing on Tuesday, with MPs urging the Government to ask the Central Bank of Bahrain to allow a temporary pause on repayments for those hit directly or indirectly.

The proposal asks the Government to direct the central bank to issue special instructions to lenders to postpone instalments due on loans and credit facilities, giving affected businesses a short grace period to ease cash pressure and get trading back on track without extra burdens during the disruption.

MP Ahmed Al Salloom, one of the sponsors, said the idea followed the approach used during the Covid-19 pandemic. ‘We submitted this proposal based on the current situation, which requires that instalments be deferred, as was the case during the Covid-19 pandemic,’ he told Parliament, pointing to stoppages in some areas and problems with goods arriving. ‘Many goods and supply chains’ were not reaching Bahrain, he said, and that carried ‘financial effects’ that warranted support for the private sector.

In the explanatory memorandum attached to the proposal, the sponsors said some shops and firms had suffered damage or a drop in activity, warning that keeping monthly repayments unchanged could deepen losses and threaten their ability to continue. Others, the memorandum says, were affected indirectly by supply-chain disruption, weaker demand and a slowdown in trade, cutting the cash they had on hand and making it harder to meet repayments on time.

The memorandum warns that without intervention debts could build up, some projects could stop, and jobs linked to them could be lost, with wider effects on the economy and social stability. A time-limited deferral, it argues, would help protect small and medium-sized firms and support labour market stability, while keeping the banking system stable through rules set by the central bank.

MP Mohammed Al Maarafi said Parliament had to take account of the circumstances facing the Kingdom after what he described as ‘brutal aggression’ by Iran against Bahrain and other GCC states. ‘If these problems are not addressed and those on the ground are not supported, the material consequences could be severe,’ he said, adding that he expected the Government to take the steps needed.

MP Hassan Ibrahim said the response should go beyond deferrals alone and include wider steps to support business. ‘The issue is not only deferring instalments, but an economic package that supports the private sector and supports the state’s economy,’ he said, adding that Bahrain’s food stocks for the next six months were reassuring, but import disruption still needed answers. ‘We need a solution for goods coming from abroad,’ he said, adding: ‘We must come out with solutions for traders and our economy must continue and not stop.’

 The proposal was submitted by MPs Khalid Buanaq, Zainab AbdulAmeer, Mohammed Al Maarafi, Hisham Al Awadhi and Ahmed Al Salloom.