Postponing loans to those affected by the "pandemic" with the calculation of interest
Manama
- 200 million dinars, bank losses from 6-month loan deferment
- Contacts heaped on banks to inquire about the delay in collecting loans
A high-ranking banking source told Al-Ayyam Al-Iqtisadi that the commercial banks operating in the Kingdom would adopt a mechanism to postpone the loan installments of citizens affected by the Corona pandemic, which will not be by dropping the interest on the loans, indicating that the mechanism will be resolved during the next week with a circular issued by the Bahrain Central Bank to retail banks .
The source - who preferred not to be named - explained that the new mechanism for loan postponement will exclude government employees and companies not affected by the pandemic, ”noting at the same time that banks will take measures to assess the damage of loan delay requests.
Last Monday, the Council of Ministers directed the Central Bank of Bahrain to urge all banks to postpone loan payments to citizens affected by the Corona pandemic until the end of this year in a manner that does not affect the liquidity and financial solvency of banks, after the expiration of the period of postponing the payment of previous loans for a period of 6 months until last August, as it is Banks are scheduled to start deducting installments at the end of September.
Regarding the size of losses suffered by local banks towards postponing loans for the past 6 months, the banking source confirmed that local banks incurred losses of more than 200 million Bahraini dinars as a result of postponing loan installments and dropping the benefits of loan schedule, after an accounting mechanism was taken to record losses on the account of shareholders without allocating provisions. Financial affects the profitability of banks.
On the other hand, a banking source confirmed that communications have begun to attack bank employees since last Tuesday to inquire about the delay in collecting loan installments, indicating that banks have not received any clarification so far regarding the mechanism and method of postponing loans, which requires relying on clear criteria for those affected by the pandemic.
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