Bahraini Parliamentary Financial Committee Decides to Impose Fees on Foreign Transfers amid Central Bank Rejection
2016-01-12 - 12:42 am
Bahrain Mirror: The Committee of Financial and Economical Affairs of the Bahraini Parliament passed a bill to impose fees on financial transfers outside Bahrain. The committee said it would be a major spring for the state's general budget, and a way to find new revenue sources to achieve progress and development in the Bahraini economy.
The Central Bank of Bahrain warned of "the severity of this proposal," stressing that "implementing such a proposal would have significant ramifications on the overall economy, and the banking and trade sector in particular; as imposing fees is considered to be a form of restriction of free flow of capitals which would limit financial transactions and this directly contradicts with Bahrain's policy based on the free economy without administrative restrictions or imposed fees."
"Due to the financial circumstances surrounding the states of the region because of the drop in oil prices, the currencies of the region's states have become constantly exposed to speculation by hedge funds and currency dealers because of the expected decline in the financial reserves. Consequently, any procedures affecting the essence of the monetary policy or restricting the freedom of funds movement would have negative impact on the official exchange rate and would expose the country to the risk of increased speculation on the dinar when the kingdom needs steadiness and stability to assure trust in dinar financial transactions especially private depositors in local banks," it further stated.
Proceeding with the bill requires the approval of the majority of the parliament. If approved, the law will be referred to the (appointed) Shura Council which is expected to reject it since it mainly comprises of tycoons, who consider adopting such a law would damage their interests.
comments powered by Disqus