Regulatory Alerts2010-04-22
Instructions Concerning the Buying and Selling of GCC Currency Notes
The Central Bank of Kuwait issued regulatory instructions mandating that banks and exchange companies accept and trade GCC currency notes (Omani Riyal, UAE Dirham, Qatari Riyal, and Bahraini Dinar) against the Kuwaiti Dinar. Banks must adhere to daily announced buying and selling rates, ensuring public transactions occur within a maximum 0.5 percent margin while treating the announced buying rate as the minimum and selling rate as the maximum for public dealings. The Central Bank further commits to purchasing any un-sold currency balances held by banks at the announced buying rate plus a 0.25 percent margin, with these directives taking immediate effect upon notification.
22- INSTRUCTIONS CONCERNING THE BUYING AND SELLING OF GCC CURRENCY NOTES
CHAPTER TWO: The law, supervisory & Regulatory Instructions & Control on Islamic Banks 22- INSTRUCTIONS CONCERNING THE BUYING AND SELLING OF GCC CURRENCY NOTES 1 GOVERNOR Ramadhan 15, 1424 H November 10, 2003 Instructions No. (2/IBS/118/2003) THE CHAIRMAN, Arrangements for Buying & Selling GCC Currency Notes Reference is made to the existing arrangements concerning the exchange of GCC countries currency notes and the agreement amongst the GCC countries monetary authorities to include the Kuwaiti Dinar to such arrangements, according to which banks and exchange companies and establishments operating in GCC countries are committed to accept and exchange all GCC currency notes (both buying and selling), with a margin not exceeding 0.5% of the daily announced exchange rates of these currencies . The Central Bank of Kuwait has set up arrangements with the GCC countries (Oman, UAE, Qatar, and Bahrain) to implement what has been agreed upon. Accordingly, it has been decided as follows: First: The Central Bank of Kuwait shall, on daily basis, advise your bank of the buying rate of the Omani Riyal, UAE Dirham, Qatari Riyal and Bahraini Dinar against KD, as well as of selling rate of those currencies against the KD, so that the buying rate will represent the minimum rate for dealing with the public, while the selling rate will represent the maximum dealing rate. Second: Your bank is required to accept the buying of these currencies from the public according to the buying rate against KD (as a minimum), as daily announced by Central Bank of Kuwait . Third: In the event your bank sells the said currencies to the public, the selling rate announced by Central Bank of Kuwait (as a maximum) shall be adhered to.
CHAPTER TWO: The law, supervisory & Regulatory Instructions & Control on Islamic Banks 22- INSTRUCTIONS CONCERNING THE BUYING AND SELLING OF GCC CURRENCY NOTES 2 Fourth: The Central Bank of Kuwait is committed to purchase the balances of the mentioned currencies existing with your bank and which have not been re-sold, at the buying rate announced by Central Bank of Kuwait on the date of its actual buying, plus a margin of 0.25% . Fifth: These instruction shall be in force from the date of notification . With my best wishes, SALEM ABDUL AZIZ AL SABAH