Move to Stop Added Interest on Payment Deferrals

TDT | Manama

Email: mail@newsofbahrain.com

Five MPs have submitted an urgent proposal calling on the Central Bank of Bahrain to instruct banks and finance companies to cancel extra interest charged on deferred instalments, saying the added sums run against the purpose of the relief programme announced recently.

The proposal was put forward by Khalid Buanaq, Zainab AbdulAmeer, Hisham Al Awadhi, Ahmed Al Salloom and Mohammed Al Maarefi, with a request for immediate discussion.

In the explanatory note attached to the proposal, Buanaq said the move was meant to ensure the scheme gave real relief to citizens rather than leaving them with higher costs later.

“This proposal concerns directing the Central Bank of Bahrain to instruct banks and finance companies to cancel the extra interest resulting from the deferral of instalments under the programme announced recently,” he said. “That would secure the main aim of the programme, which is to ease financial burdens on citizens in the current conditions.”

He said some lenders had added extra interest to the deferred payments, leaving borrowers with heavier dues instead of the relief the scheme was meant to bring. “Banks and finance companies are imposing extra interest on the deferred instalments, which leads to higher financial obligations for citizens instead of easing them,” he said. “It strips the programme of its real purpose, so that the real benefit goes to financial institutions at the expense of the citizens who are meant to benefit.”

The proposal says this runs against the social and economic purpose behind the scheme, arguing that deferring instalments should help citizens at a time of need, not leave them facing a longer burden through accumulated interest.

Buanaq also said banks had already gained from other support schemes and should now play their part.

“Banks have benefited from other support programmes, including the covering of staff salaries for a fixed period,” he said. “That means they should play their part in supporting citizens, rather than placing extra burdens on them.”

The MPs said the proposal aimed to keep the instalment deferral programme focused on easing financial pressure on citizens, stop added interest from raising the burden on those using it, and push banks and finance firms to do more to support household stability.

They said it was submitted on an urgent basis because the extra charges were having a direct effect on living conditions.

“The continuation of these extra charges increases financial burdens and causes obligations to pile up on citizens, in a way that runs against the urgent aim of the programme, which is to provide support and relief,” the note said. “This situation could deepen the strain on a wide section of citizens, making urgent action necessary to put the programme back on track and ensure it gives the relief it was meant to provide.”