A digital revolution is quietly blossoming in the kingdom with the Central Bank of Bahrain (CBB) reporting strong activity in its core payment systems last year, highlighting the growing adoption of electronic and real-time transactions.The national banking and financial services regulator’s annual report for 2023 notes that the CBB’s Real-Time Gross Settlement (RTGS) processed more than 360,000 bank transfers valued at BD104.1 billion ($27.7bn) throughout the year.
This translates to a daily average of nearly 1,500 transfers worth BD418.1 million ($111.7m).Notably, customer-driven transactions formed a significant portion of the RTGS volume, accounting for BD4.9bn ($1.3bn) in 2023.In simple terms, the RTGS functions as the express lane of the financial system, allowing for near-instantaneous transfers of hefty sums between banks.The rapid adoption in the use of payment services offered under the Electronic Funds Transfer System (EFTS) operated by Benefit, which also runs the national ATM and point-of-sale switch, indicates a growing preference for cashless convenience among Bahraini residents.
Fawri+ is an instant, low-value payment service which allows individuals or entities to transfer funds of up to BD1,000 per day in less than 30 seconds; whereas Fawri caters to same-day or future-dated transfers, handling both small and large value payments on working days.In 2023, the number of Fawri+ transactions reached a staggering 334.8m, with a daily average of more than 917,000 transfers and a total value of BD7.3bn. Last year, Fawri handled 12.4m transactions totalling BD20.7bn (daily average: 34,000 transactions, BD56.7m).Streamlining the once-dreaded task of wrangling overdue invoices, Fawateer is the electronic bill presentment and payment (EBPP) system that allows bank account holders to settle bills from both online and offline billers.Fawateer transactions in 2023 surpassed 12.7m, with a daily average exceeding 34,900 and a total value of BD989.2m.This trend extends to the ubiquitous ATMs which saw a steady stream of withdrawals throughout the year, at 13,371,623 and totalling an amount of BD1.358 billion with a daily average of 36,635 transactions and an average daily value of BD3.721m.While traditional cheque usage continues, its volume has declined compared to electronic transfers.
The CBB reported more than 2m cheques cleared in 2023, totalling BD7.04bn ($1.9bn).Securities transactions also saw robust growth through the CBB-operated Scripless Securities Settlement (SSS) system.This system acts like a safe deposit box for digital government bonds (scripless form) and handles buying and selling them electronically. It even works with the RTGS system (fast money transfers) to make settlements smooth.More than 3,200 transactions valued at BD13.3bn ($3.5bn) were settled through SSS in 2023, showcasing the active participation in government securities issuance.
The daily average number of transactions was 13 and the average daily value was BD53.509m.Total fees received from RTGS and SSS member banks (transaction fees and annual membership fees) amounted to BD395,476 in 2023.The CBB also highlighted the success of its cross-border payment system, AFAQ, launched in collaboration with the Saudi Arabian Monetary Agency (SAMA) in December 2020.More than 49,000 cross-border transfers valued at BD363.96m ($97.3m) were processed through AFAQ in 2023, facilitating seamless financial transactions between the two nations, a potential boon for regional trade.The volume of the incoming bank transfers through the service was 433 for a value of BD1.9m and the volume of outgoing payments was 1,197 for a value of BD5.98m.Incoming customer payments through AFAQ totalled 18,728 with a value of BD83.71m whereas the volume of outgoing customer transfers was 28,807 for a value of BD272.37m.
Bahrain’s currency deposits reached BD741.3m in 2023, while withdrawals were BD724.8m.The value of currency in circulation at last year’s end stood at BD668.5m. This comprised BD23.1m in coins and BD645.4m in banknotes.Of the banknotes in circulation, BD61m belonged to the fourth issue, representing 9.5pc of the total. The upgraded fourth issue of BD20, BD10, and BD5 notes, featuring new security features, made up the remaining BD575.9m, or 89.2pc of the total. Banknotes from the third issue accounted for the remaining BD8.4m, or 1.3pc of the total.These figures underscore Bahrain’s commitment to fostering a modern and efficient payment landscape, catering to the evolving needs of its citizens and businesses.Meanwhile, the CBB announced that this year it will be launching a collection of silver medal sets, each featuring four commemorative medals showcasing the vibrant marine life that thrives in Bahrain’s waters.These limited-edition collectibles follow 300 sets of a medal series unveiled last year as a tribute to Bahrain’s wildlife.avinash@gdnmedia.bh