Bahrain has long been recognized as a leading financial hub in the Middle East, hosting a diverse array of licensed and regulated banks that offer both conventional and Islamic banking services. For newcomers in Bahrain, opening a bank account is a crucial first step for receiving your salary and managing transactions. This article will guide you through the workings of Bahrain's banking system, covering essential aspects of both conventional and Islamic banking, the process of opening an account with local banks, and the use of mobile banking services.
Bahrain's banking scene
Bahrain has a diverse and well-regulated banking system supervised by the Central Bank of Bahrain (CBB). More than 100 institutions fall into the banking sector, including conventional banks, Islamic banks, and investment banks. The broader financial services sector in which Bahrain operates is known in regions around the world as one of the best, especially for its Islamic Banking services since it is based on Sharia Laws.
Conventional banks
These are some of the conventional banks in Bahrain that most people choose to visit:
- National Bank of Bahrain (NBB): One of the oldest and most reliable banks in Bahrain, wherein a broad spectrum of services is presented including, savings accounts, personal loans, mortgages, and many more.
- Ahli United Bank (AUB): Quite popular with expatriates for its diversity of services and it is very easy for people to open multi-currency accounts.
- Bank of Bahrain and Kuwait (BBK): BBK has a reputation in terms of both personal and corporate banking services with many expatriates because of its many branches and ATMs.
- Arab Banking Corporation (Bank ABC): Being one of the biggest banks in Bahrain, Bank ABC also provides both individual and corporate banking. It is favored by expatriates for its multi-currency accounts, international remittances, and credit facilities. Bank ABC operates Ila Bank, which is the first fully digital bank in Bahrain. Services provided include savings and current accounts, personal loans, trade finance and digital banking.
- Gulf International Bank (GIB): A regional bank based in Bahrain that primarily offers its services to corporate clientele but also provides personal banking. Offers investment solutions and digital banking services. Services provided include personal and corporate banking, investment and wealth management, digital bank, and international remittance.
- Khaleeji Commercial Bank (KHCB): Even though it is mostly regarded as an Islamic Bank, KHCB also has some typical banking activities. Offers several personal banking solutions, such as home finance and investment options. Sectors include personal loans, mortgage products and services, investment services and digital banking.
International banks
For expatriates needing to remit funds or maintain multi-currency accounts, international banks are particularly important in Bahrain. Some of the most popular international banks are:
- HSBC Bahrain: HSBC boasts many international banking products and services that are especially beneficial to expatriates such as international money transfers and international savings accounts.
- Citibank Bahrain: With its wealth management and targeted personal banking portfolios, Citibank is highly attractive to expats and is considered one of the preferred banks for affluent individuals.
- Standard Chartered Bahrain: One of the major benefits in the field of personal and corporate banking such as retail and commercial banking is Standard Chartered, which also includes Islamic banking windows.
- BNP Paribas Bahrain: A French multinational bank, BNP Paribas provides investment, corporate banking and wealth management services this bank is very popular among European expatriates. Services offered are personal banking, wealth management, global financial services and multi-currency accounts.
Islamic banking
Over the past twenty years, Bahrain has become a global leader in Islamic banking and has gained significant prominence in the field of Islamic finance. Islamic banking operates under the principles of Sharia law, which forbids interest-based transactions (riba) and promotes profit sharing and ethical investments. Leading Islamic banks include:
- Bahrain Islamic Bank (BisB): The oldest provider of Islamic financial services in Bahrain, with a wide range of Sharia-compliant products such as current accounts, savings accounts, home finance, and investment banking, welcomes as many as 70,000 customers.
- Al Salam Bank: While also providing Sharia-compliant services, Al Salam Bank's primary focus remains conventional Banking. They provide retail banking as well as investment and expatriate banking focusing on e-banking. Some of the services offered are personal loans, credit cards, multi-currency accounts and insurance services.
- Kuwait Finance House Bahrain (KFH Bahrain): Islamic finance house based in Bahrain offers a plethora of Sharia' compliant products including car finance, housing finance, Mudaraba (profit-sharing), and Murabaha (cost-plus selling).
- Al Baraka Islamic Bank: Considered one of the pioneers in the Islamic banking industry, which offers Murabaha, Ijara, and Takaful products to clients.
- Gulf Finance House (GFH): GFH is known as an international Islamic investment bank that provides a whole range of Shari'ah-based services such as retail and corporate banking services. They are recognized for their investments in the field of real estate and unique Islamic financial products. GFH offers real estate investments, wealth management, sukuk, and Islamic loans.
- Arcapita Bank: Arcapita is a global Islamic investment bank that adheres to the fundamental principles of Islam. It specializes in private equity, real estate, and infrastructure projects, ensuring all ventures comply with Sharia law. The bank's main areas of business include private equity, real estate development, and various alternative investments.
The Wage Protection System (WPS) in Bahrain
Since September 2019, Bahrain has implemented the Wage Protection System (WPS) to guarantee timely salary payments to employees by mandating that all basic wages be deposited into a bank account. By mid-2020, this system was fully adopted across all sectors in Bahrain. As a result, all employees in Bahrain are required to open a local bank account to receive their salaries through the WPS. This system enhances the transparency of salary transactions and plays a crucial role in safeguarding employee rights in the workplace.
Opening a bank account in Bahrain
The procedure of opening a bank account in Bahrain is similar to that seen in other countries, though there is a need for compliance with specific local requirements in terms of presentation of various documents. Generally speaking, most banks tend to have an employee who speaks English since it is a common language in Bahrain.
In most cases, prior to opening a bank account in Bahrain, you will be provided with the following:
No Objection Certificate (NOC): This is a letter given by an employer that states the amount of salary that the employer will be paying the worker thus confirming the area that the employee will be using.
Passport: It is a must for applicants to have an original passport for proof of identity.
Residency Permit (CPR Card): Proof of residency is a must when obtaining the Central Population Registry (CPR) card.
Proof of address: A tenancy agreement, utility bill, or any other official document that confirms your residential address in Bahrain, which would suffice most banks' requirements.
Employment contract: One of the banks may ask for this to confirm your wage and employment details.
Good to know:
Banks in Bahrain usually provide accounts in BHD, USD, or any other foreign currency. Also, some banks offer multi-currency accounts, helping expatriates accustomed to making international transactions with ease.
Banking hours in Bahrain
Most banks in Bahrain open their doors at 7:30 am and close at 2:00 pm from Sunday to Thursday. Some banks that have branches in shopping centers often open for longer. Additionally, most Bahrain banks have a call center or online chat service that is available 24/7. Customers can receive help even when the business is not open to the public.
Banking services in Bahrain
Debit and credit cards
Whenever a new current account is opened at most banks that provide cash withdrawal and point-of-sale payment services, customers typically receive a debit card. Additionally, you may apply for a credit card, though eligibility depends on your income level and creditworthiness.
Banks offer various types of credit cards, each with different benefits such as cashback, travel perks, and access to premium services. Islamic banks also provide Sharia-compliant credit cards that adhere to the Tawarruq principle, which prohibits interest charges.
Personal loans and housing finance
In Bahrain, banks provide personal, auto, and home loans to both expatriates and local residents. For expatriates, the loan amount and eligibility criteria are determined by the individual's income and residency status.
Islamic banks in Bahrain offer home financing options, such as Ijara and Murabaha, which comply with Islamic laws and serve as alternatives to traditional mortgages.
International remittance
Bahrain's banking sector offers international transfer services through SWIFT, Western Union, and various other remittance companies. Additionally, many banks provide reduced transfer fees for clients with premium accounts.
Premium banking solutions
Many banks in Bahrain offer premium accounts designed for individuals with substantial wealth, providing several advantages:
- Preferred banking services;
- Preferential rates on loans;
- International transfers without additional fees;
- Access to airport lounges throughout the Middle East.
These accounts typically require higher balance thresholds but enhance the banking experience for expatriates and business professionals.
Online banking in Bahrain
Due to increasing demand, most banks in Bahrain have introduced online management and services. These platforms enable users to handle their accounts, transfer funds, and make payments effortlessly from any location.
Ila Bank, Bahrain's first entirely digital and mobile-only bank launched by Bank ABC allows customers to perform banking transactions such as money transfers and account management entirely via their smartphones. Its key features are as follows:
- Almost instant account opening;
- Real-time transaction alerts;
- Budget setting capabilities for account holders;
- Availability of accounts in various currencies.
Other online banking services
Many conventional and Islamic banks may have limited mobile applications, yet they still offer:
- Access to muhhasaba processes on mobile devices;
- Notifications to customers about their transactions;
- Bill payments for utilities, telecom services, and rental agreements;
- The ability to transfer money both physically and online, within and outside of Bahrain.
Banks such as BBK, NBB, and BisB have developed mobile applications featuring secure login capabilities, enabling banking at any time and from any location.
How to make payments in Bahrain
ATMs
ATMs are widely available throughout Bahrain, allowing for cash withdrawals and balance inquiries on your accounts. Most are integrated into an interbank network that permits fee-free withdrawals, even from ATMs of different banks. However, some international banks may impose fees on expatriates for using ATM cards issued by other banks.
Cash
Cash remains a common medium for many transactions in Bahrain, yet credit and debit card payments are widely accepted at most supermarkets, shops, and restaurants. Additionally, there is an increasing trend towards contactless payments, with many stores now supporting platforms like Apple Pay, Google Pay, and others.
Cheques
Banks often require cheques for significant transactions, such as paying rent or conducting business deals, as cheques are less commonly used for everyday shopping. It's crucial to note that in Bahrain, issuing a bounced cheque or any cheque without sufficient funds is considered a serious offense, punishable by fines and imprisonment.
Online payment platforms in Bahrain
The Central Bank of Bahrain (CBB) and the BENEFIT Company have significantly advanced digital payments by introducing regulations and initiatives that promote internet use. These efforts have contributed to the growing popularity of digital wallets and contactless payment systems in Bahrain. Additionally, the expansion of e-commerce and a robust fintech ecosystem has driven the demand for efficient and secure electronic payment solutions.
BenefitPay is the most popular app in Bahrain for cashless transactions, endorsed by the Central Bank of Bahrain. It simplifies payments and transfers between banks with features like real-time transfers (Fawri+) and scheduled transfers (Fawri). The app enables QR code payments, bill payments, and contactless transactions and includes a mobile wallet for easy cash withdrawals. Users can also send money internationally, split bills easily, and manage payment requests for shared expenses.
Besides BenefitPay, residents also use Apple Pay and Google Pay for secure and convenient transactions.
Apple Pay is widely used for secure in-store, online, and app purchases, offering contactless payments and supporting multiple currencies.
Known in Bahrain as Android Pay, Google Pay is compatible with most Android devices and facilitates easy in-app and point-of-sale payments, enhancing transaction security with advanced user verification.
Useful links:
National Bank of Bahrain (NBB)
Bank of Bahrain and Kuwait (BBK)
Arab Banking Corporation (Bank ABC)
ila Bank (operated by Bank ABC)
We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.
