BAHRAIN will sign on to a new company that will allow large direct financial transactions between Gulf states.
In their weekly meeting yesterday, Shura Council members gave the government the go-ahead to sign the set-up and foundation terms of the GCC Payment System Company.
The company, which has been backed by the Central Bank of Bahrain (CBB) and the Bahrain Chamber of Commerce and Industry, will enable the transfer of large payments directly between member countries and settle disputes, while also reducing the cost of transactions and allowing more efficient organisation.
The company will have two headquarters, in Riyadh and Abu Dhabi, and will handle two transfers daily.
Saudi Arabia and Oman have already completed all related formalities, while Bahrain and Kuwait are in the process.
CBB Governor Rasheed Al Maraj said the company will operate in GCC currencies without any foreign mediators.
“At the moment settlements are done through a mediator in New York in USD, but things will now be settled immediately and in low-cost direct transfers,” he said.
“There will be no effect on the GCC currency exchange – this is to ease commercial and investment deals within the Gulf.
“Bahrain has paid its share of the six million riyal operational cost and it will be represented with two members from each country on the board – the CBB governor and a specialist from the CBB and matters will be handled on a daily basis.”
Shura’s financial and economic affairs committee chairman Khalid Al Maskati said the company will be in the advantage of all GCC economies.
“Instead of transferring money through mediums in the US and incurring huge costs besides changing from local currency to the dollar and then back to the currency of the receiving state, it now means that such financial arrangements could be done directly,” he said.
“The company is a huge step forward towards financial and economic progression within member states as things would be conducted on a daily basis.”
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