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10 March 2020
REGULATION

Central Bank of Bahrain bans freezing of accounts after job loss

The central bank said that the move is aimed at ensuring sound and fair banking practices, taking into consideration the interests of customers

Last week CBB urged banks and financing institutions to consider rescheduling credit instalments in light of the coronavirus outbreak/Bloomberg

by Kudakwashe Muzoriwa

The Central Bank of Bahrain (CBB) has banned retail banks from blocking accounts of customers who have either lost their employment or has retired if that customer has a financing arrangement with the bank, according to local newswire, Bahrain News Agency.

The regulator prohibited the freezing of accounts by retail banks, regardless of whether or not contractually the bank has the right to take such action.

The instruction by the central bank to keep accounts accessible following job losses or retirement even if the customer has a credit facility with the lender comes at a time when central banks around the world are weighing measures to mitigate the economic impact of the coronavirus.

Last week CBB urged banks and financing institutions to consider rescheduling or granting deferrals on credit instalments in light of the coronavirus outbreak.

Additionally, the regulator also asked the financial institutions to reduce profit and interest rates, fees and commissions or other measures for customers affected by the outbreak.

Across the Arabian Gulf region, the Central Bank of the UAE (CBUAE) also urged financial institutions to re-schedule loan contracts, grant temporary deferrals on monthly loan payments and reduce fees and commissions to customers as part of measures to mitigate the effects of coronavirus.

CBUAE also established a committee engaging UAE Banks Federation to assess the situation and identify possible solutions.

In a statement, the CBUAE advised banks and finance companies to review and update their business continuity plans to ensure the

The World Health Organisation advised countries to be prepared for a scenario in which the coronavirus turns into a pandemic where economic impact in affected countries can be relatively large.

 


RELATED STORIES: Central Bank of Bahrain Central Bank of the UAE

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