Central Bank of Bahrain launches consultation on new Buy Now Pay Later module for 12-month interest-free credit

The Central Bank of Bahrain has issued a consultation on a proposed new “Buy Now Pay Later” (BNPL) Module for its Rulebook (Volume 5: Financing Companies), setting out tailored requirements for short-term credit offerings and requesting licensee feedback via an accompanying questionnaire. The draft module applies to licensees offering BNPL credit repayable within 12 months, where a merchant supplies goods or services and a third-party BNPL provider pays the merchant and extends interest-free (profit-free for Sharia-compliant) credit to the customer. It proposes a minimum capital requirement of BHD 250,000 and a risk-based exposure cap where total exposures must not exceed five times aggregate shareholders’ equity, with notification to the Central Bank of Bahrain within five business days of a breach (or expected breach) and an action plan to restore compliance. The module also includes conduct and consumer protection measures covering marketing and disclosures, fee and charging restrictions (including no early repayment fees), customer onboarding and affordability assessments (including a 50% total repayment ratio cap for customers earning under BHD 3,000 per month), Bahrain Credit Reference Bureau checks and real-time reporting, treatment of customers in repayment difficulty, digital security and operational controls, and a complaints handling framework with specified acknowledgement and response timelines and quarterly reporting. Comments (including nil responses) and completed consultation questions are due by 8 December 2025, with the proposed requirements made available via the Central Bank of Bahrain’s “Open Consultations” webpage.