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Tue 6 May 2014 12:21 PM

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Bahrain approves $13bn loan cap

Council members were reportedly divided on whether to pass or reject the decree

Bahrain approves $13bn loan cap
(AFP/Getty Images)

A Royal Decree that will permit the Bahraini government to borrow up to BD5bn ($13.26bn) has been approved by the Gulf state's Shura Council, it was reported.

Council members were reportedly divided on whether to pass or reject the decree, arguing the government should adopt a better system of financial management, Gulf Daily News reported.

The decree, which had been issued during the National Assembly’s recess last year, increases the maximum borrowing limit for the government from BD3.5bn to BD5bn.

It was passed 20-14, with the government facing the prospect of having to return all the money it had borrowed if it was rejected.

Shura Council financial and economic affairs committee chairman Khalid Al Maskati urged members to approve the increased borrowing limit, saying that it would be illogical to reject it now since the money has been already borrowed and spent.

Council first vice-chairman Jamal Fakhro was quoted as saying the government should inform legislators how it planned to repay the money it had been borrowing.

“The government continues to borrow without a policy on cutting spending or stopping unnecessary deals and it has to tell us how it would repay such huge amounts,” he said.