Regulatory Alerts2012-12-19
Disclosure of Interest, Profit Rates, Fees and Charges by Retail Banks and Financing Companies
The Central Bank of Bahrain issued a proposed directive requiring retail banks and financing companies to publicly disclose interest rates, profit rates, fees, and charges for credit facilities through conspicuous notices. The framework standardizes calculation scenarios, clarifies Islamic Sharia compliance regarding fee-based versus profit-rate products and top-up mechanisms, and mandates clear communication of late payment charges and relevant risks. By aligning domestic rules with international best practices, the directive enables consumers to compare pricing across institutions while allowing banks to maintain risk-based pricing and service-quality differentiation.
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