Bahrain Launches Loan Deferral Scheme with BHD 7 Billion Liquidity Boost

The Central Bank of Bahrain has announced a new loan deferral and liquidity support programme aimed at strengthening the Kingdom’s economy and financial sector, in line with directives from Salman bin Hamad Al Khalifa.

Under the initiative, retail banks and financing companies will allow customers to defer loan instalments and credit card payments — including both principal and interest — for a period of three months. The option will be available to both individuals and businesses, with institutions given flexibility in how they classify affected loans. The total value of domestic loans currently stands at approximately BHD 11.3 billion.

To further support the banking sector, the CBB will provide retail banks with liquidity in Bahraini dinars against eligible collateral for six months, with available support currently estimated at BHD 7 billion. The central bank has also extended its repo facility to three months.

In addition, key financial requirements have been eased to boost liquidity. The reserve requirement ratio has been reduced from 5% to 3.5%, while both the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) have been lowered from 100% to 80%, allowing more funds to flow into the economy.

The CBB reaffirmed that Bahrain’s banking sector remains stable, supported by strong capital and liquidity levels. It added that it will continue monitoring developments and is prepared to introduce further measures to maintain financial stability and ensure uninterrupted banking services across the Kingdom.