Regulatory Alerts2021-12-27
Instructions Concerning Credit Facilities Extended to Board of Directors
The Central Bank of Kuwait mandates that local banks obtain prior General Assembly approval and a three-quarters board majority before extending credit facilities to directors and economically or legally related parties. The regulations require fully secured cash facilities with adequate collateral margins, specific margin ratios for non-cash instruments like bank acceptances and letters of guarantee, and interest rates aligned with standard customer pricing. Additionally, banks must conduct thorough credit studies, report quarterly balances and collateral status to the Central Bank, and fully comply with these requirements within two years of issuance.
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