Bahrain Central Bank Tells Islamic Lenders to Get Credit Rating

The Central Bank of Bahrain has told all Islamic lenders in the country to get a credit rating as part of efforts to boost transparency and strengthen the financial sector.

“We are not making it mandatory at this stage, but we are advising all the Islamic banks to do it,” Rasheed Al Maraj, governor of the Central Bank of Bahrain, told reporters on the sidelines of a conference in Manama today. “I would expect them all to have done this in the next two years.”

Bahrain has taken other steps to strengthen its banking industry since the financial crisis, including encouraging small banks to merge into better capitalized entities. As many as 10 banks have combined, including Al Salam Bank and BMI Bank with a deal in late 2013 that created the country’s fourth largest lender. Al Maraj said more mergers will be announced this year.

There are 24 Islamic banks with total assets of $23.1 billion among Bahrain’s 400 financial institutions, according to the central bank.

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