Bahrain central bank asks banks to extend loan repayments for six months more

FILE PHOTO: The Central Bank of Bahrain is seen in Manama, October 27, 2013. REUTERS/Hamad I Mohammed

DUBAI (Reuters) - Bahrain’s central bank has asked banks and financing firms to extend loan repayments for six more months from January, as it moves to mitigate the effects of the coronavirus pandemic on businesses and individuals.

In a circular issued on Tuesday, it said banks should keep the instalment amount unchanged and not increase profit or interest rates on such loans.

The central bank said it would reassess the need for continuing with such concessionary measures in 2021.

Gulf central banks have tried to protect businesses from the impact of the COVID-19 pandemic through stimulus measures such as debt repayment delays.

This month Fitch Ratings said banks in the region would see more asset-quality deterioration in 2021, when loan deferral programmes and regulatory flexibility for banks to recognise impairments end.

Reporting by Saeed Azhar; Editing by Clarence Fernandez