Prosperous banking network

Bahrain’s financial institutions provide one of the best growth environments in the region

Bahrain has a robust and multidimensional banking network. It encompasses local and foreign banks, which are strictly regulated and are profitable entities. The tiny Arab country is very business-friendly and offers a competitive economic environment. It maintains a fixed exchange rate between the Bahraini dinar and the US dollar, and this aspect is considered as one of the central theme of stability in the kingdom. Bahrain’s monetary policy is well-disciplined, and meets international standards of monitoring and professionalism.

Bahrain has a surplus economy with $12 billion imports and exports, each, and despite its small size is the 79th largest economy of the world. Bahrain’s banking and financial services are benefitted by contained inflation, and a host of stringent regulations that make Bahrain the cradle for trade and commerce with its major allies in Saudi Arabia, UAE, and the MENA region. Banks and financial institutions in private and public sectors provide one of the best investment and growth environments in the region.

The country’s free market economy with an unbridled capital movement is supplemented by multi-dimensional banking system consisting of both conventional and Islamic banks. Collaboration of financial institutions between the UAE and Bahrain has a potential of billions of dollars. Likewise, it has a roaring Islamic banking network, which gathers greater dividends by working with Shariah-compliant banks in the region and beyond.

Bahrain is home to more than 400 licensed financial institutions from all over the world. Financial services encompass wholesale banking, insurance and funds/ asset management. The financial sector accounts for more than 27 per cent of GDP. It is also the largest single employer in Bahrain, with Bahrainis representing over 80 per cent of the workforce.

The sector is regulated and supervised by the Central Bank of Bahrain (CBB), which has functioned as the single regulator since 2002. Bahrain’s banking system is the largest component of the financial system, accounting for over 85 per cent of the total financial assets. The conventional segment includes 19 Retail Banks, 69 Wholesale Banks, two Specialised banks as well as 36 representative offices of Overseas Banks. The Islamic segment, offering a host of Shariah Compliant products and services include six Retail Banks and 18 Wholesale Banks, and the numbers are increasing continuously.

— mehkri@khaleejtimes.com