Banking in Bahrain

by Barclays Wealth International on April 16, 2010

Moving to the Kingdom of Bahrain?

Your guide to expatriate banking services in Bahrain

The Kingdom of Bahrain is a small independent country that lies along the coast of the Arabian Gulf. The Bahrain economy is driven by oil and aluminium production, and the recent global economic crisis resulted in a slowing of economic growth in Bahrain. Bahrain in considered to be one the major centres for Islamic banking.

The official language spoken in Bahrain is Arabic, although English is widely spoken throughout the country, particularly in international business.

The unit of currency is the Bahraini dinar (BHD), divided into 1,000 fils. As of April 2010, the exchange rate was approximately 1 BHD to £1.74 GBP (pound sterling).

Banks in Bahrain

Central bank

  • Central Bank of Bahrain

Local commercial banks in Bahrain

  • Ahli United Bank BSC (AUB)
  • Bahrain Islamic Bank
  • Bahraini Saudi Bank
  • Bank of Bahrain and Kuwait
  • Future Bank
  • National Bank of Bahrain
  • Shamil Bank of Bahrain

Foreign commercial banks in Bahrain

  • Arab Bank PLC
  • Barclays Bank
  • Citibank NA
  • Habib Bank
  • Standard Chartered Bank
  • United Bank

Bank opening times in the Kingdom of Bahrain

Bank opening hours in Bahrain reflect the Islamic culture, with banks typically opening from 7.30am to 2.30pm (Sunday to Thursday), with Friday and Saturdays being a day of rest.

Banking services in Bahrain

Banks in Bahrain offer a comprehensive range of financial services and accounts for customers, including online banking, telephone banking, savings and investment accounts, in addition to comprehensive card services. A number of banks, including the Bahrain Islamic Bank, also operate accounts that offer customers the chance to win monthly prizes in return for holding savings accounts with them. Many of Bahrain’s banks offer full Islamic banking services to its customers, compliant with Sharia law.

The main types of bank account in Bahrain

Current accounts

Bahrain banks offer customers a wide range of account options, which can broadly be categorised in 3 main account types:

  • Current accounts – current accounts in Bahrain are typically used for everyday banking, and customers are provided with a comprehensive range of services and facilities, including ATM cards, cheque book, internet and telephone banking services, standing orders, international transfers and monthly statements. These accounts, although generally offered with no monthly fees, may offer account holders little, if any, interest.
  • Savings accounts – typically pays a higher rate of interest than current accounts, but account holders may have limited access to funds. Savings accounts in Bahrain may come with an ATM card and a facility to pay utility bills and make money transfers. Many banks operate savings accounts that offer account holders the opportunity to win cash from monthly prize draws.
  • Fixed-deposit accounts – these accounts are primarily for long-term saving, often with fixed investment levels that are fixed for a specified period of time. These accounts may offer limited or no access to funds until the account matures, and minimum account balances are likely to be higher than savings accounts.

In addition to these broad account types, many banks will offer account options that allow accounts to be opened in a range of foreign currencies, including pound sterling and US dollars. Islamic accounts may also be available, should you wish to operate an account within the rules of Sharia Law.

Opening a bank account when you arrive in Bahrain

Regulations for opening bank accounts are more stringent than many other countries in the Gulf region, and may vary between banks. However, the basic requirements for opening an account include;

  • residence permit (if applicable)
  • ‘letter of no objection’ or  ‘no objection certificate’ (NOC) from your employer, stating your salary and expected monthly salary deposits
  • tenancy agreement to provide evidence of residential address
  • copy of your passport and passport-sized photographs

In addition to the above, supplying recent bank statements and letter of reference from your current bank will also help in the application process.

Opening a bank account before you arrive in Bahrain

Many of the major retail banks in Bahrain have international branches, which can be visited in person to apply for an account. In addition, it may be possible to open an account by phone or online. As with opening an account when you are in the country, you will need to supply the bank with the relevant forms of identification and documentation, which may need to be supplied to the bank in their original format when you arrive in Bahrain.

An alternative to opening a local account is to open an international bank account in Bahrain before you arrive. In addition to providing you with access to a secure range of international banking services, you will also have access to a range of savings and bank accounts, which include online banking facilities, international payments and online money transfer services.

International accounts can be opened before you move to Bahrain, and provide expats living and working in Bahrain with a convenient and comprehensive way to manage their finances abroad.

ATM facilities in Bahrain

Bahrain has a network of over 300 ATMs, operated by ‘BENEFIT’ (Bahrain Electronic Network for Financial Transactions), that can be used by banking customers. Cash withdrawals and balance enquires using an ATM card from a Bahraini bank are free of charge, and holders of a ‘BENEFIT’ card can even use this free facility in ATMS in Egypt, Lebanon and Jordan.

Credit and charge cards

ATMs also accept major credit card cash withdrawals, but these services will incur a service charge. Currently, all ATMs in Bahrain, UAE, Qatar, Kuwait and Oman will accept any AMEX (American Express) cards at ATMs.

Major credit cards are accepted throughout Bahrain as a means of payment, but credit card transactions are likely to incur a surcharge. Outside of the major towns and cities, particularly in more rural areas, card payments may not be as widely accepted; it is worth holding a small amount of cash for instances when card payment is not acceptable.

Cheques

Cheque usage, in contrast to many European countries, is rising in the Kingdom of Bahrain. As of January 2010, cheques with a new design and additional security features (including a watermark) have been introduced by the Central Bank of Bahrain into the banking system. Old style cheques will still be valid until August 2011, after which time they will be no longer accepted. The introduction of the new cheque format is to minimise cheque fraud, and also improve the efficiency of the cheque clearing system.

Managing your account

When issuing cheques, it is paramount that you manage your account responsibly. Issuing personal cheques, whilst having insufficient funds to honour the payment, is seen as fraudulent behaviour, and is treated as a serious offence. Before you issue a cheque, always ensure that you have sufficient account funds.

Money transfers to and from Bahrain

In addition to the money transfer services provided by the banks, you will find a range of specialist money transfer services available in the Kingdom.

Currency regulations relating to the import and export of currencies are subject to change, and you should always check the latest currency limits with the Central Bank or Customs Department, prior to entering or leaving the Kingdom.

As of April 2010, there are no restrictions on the movement of either local or foreign currency into or out of Bahrain.

Bank charges

Whilst many accounts can be operated free of charge in Bahrain, some accounts may come with conditions, such as minimum account balances that must be maintained. In addition, a number of services that are not an integral feature of an account are likely to attract an additional fee. It is advisable to check with the bank where you either hold, or intend to hold your account, to clarify the fee structure.

Banking in Bahrain– other information

Bahrain Association of Banks

If you have an issue or a complaint regarding financial services in Bahrain, which you are unable to resolve directly with your bank, you should contact the Bahrain Association of Banks:

www.banksbahrain.org

More information on banking with Barclays Wealth International

For further information about the benefits of opening an International Account before you move to Bahrain, you can speak to a specialist adviser at Barclays Wealth International by calling +44 (0) 141 352 3902.

Alternatively, find out more about the overseas banking services and expat banking that are available from Barclays Wealth International.

{ 1 comment… read it below or add one }

Joanne October 20, 2010 at 7:07 am

Hi, i am new here in bahrain but i am wondering if anyone out there knows a bank here where i can obtain a mortgage to purchase a house in portugal?

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