SIO Opposes Bill Limiting Loan Repayment Fees
TDT | Manama
Email: mail@newsofbahrain.com
The General Social Organisation (SIO) has expressed reservations regarding a proposed law aimed at capping the total returns on replacement loans at BD 150. The authority argues that this would negatively impact the revenue of the pension and social insurance fund.
In its response to the proposed bill, SIO emphasised its commitment to maximizing investment returns to meet evolving economic and social challenges, ensuring the fund's sustainability and ability to fulfill its obligations.
The organisation highlighted that the replacement loan system is designed to protect the rights and funds of social insurance participants, and the returns from these loans contribute significantly to the fund's liquidity. SIO noted that the calculation of returns on replacement loans adheres to regulations outlined in the Social Insurance Law and its implementing decisions, which determine the monthly installment amount and the return rate.
Conversely, the Parliament's Financial and Economic Affairs Committee supports the bill, proposed by MP Mohammed Al Maarefi, believing it would alleviate the financial burdens on citizens. The Services Committee, which also reviewed the proposal, recommended its approval. The bill's explanatory memorandum explained that it aims to set a maximum limit on the total replacement loan repayments received by SIO, thereby reducing the burden on pensioners and adapting to changing circumstances and relevant legislation.
The proposed bill is scheduled for a parliamentary vote next Tuesday.
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