‘Govt must intervene to curb banks charging high interest rates’

A Bahraini MP yesterday demanded the government to intervene to “curb” the high interest rates imposed by commercial banks in Bahrain on its clients, taking into consideration the “tough” economic circumstances that the country is currently experiencing.

This was stated by MP Adel Al Asoomi in response to a recent report which mentioned that the profits of some Bahraini commercial banks in Bahrain Bourse have jumped to BD640 million in the first six months of the current year, increasing by BD241.2 million in comparison with the same period last year.

Mr Al Asoomi commented in a statement posted online yesterday saying: “Profit growth indicates that commercial banks are making a large percentage of profit due to the high interest rates imposed on commercial and personal loans. This will affect the economic situation in the Kingdom of Bahrain.”

He questioned: “Is it reasonable for commercial banks to make BD241 million profit in six months? The continuation of imposing high interest rates by banks will contribute to the worsening of the economic situation in Bahrain. Rather than playing a positive role, these banks will have a negative impact because of the high interest rates, which exceed the capabilities of the Bahraini economy.”

Mr Al Asoomi, who’s the longest continuously serving MP, criticised some of the commercial banks in Bahrain, citing that banks around the world, during an “economic recession”, usually reduce their interest rates and become more flexible with traders and borrowers.

The MP called upon the government of Bahrain to interfere and instruct the Central Bank of Bahrain to curb the high interest rates imposed on commercial and personal loans, adding that a “decisive intervention” is important to contribute to the revival of the economic process, rather than contributing to its re cession.