Regulatory Alerts2021-10-31
Instructions on the Rationalization and Organization of Bank Credit Policy
The Central Bank of Kuwait issues a comprehensive framework of instructions and circulars to rationalize bank credit policy across all local financial institutions. Banks are mandated to refrain from extending facilities against post-dated cheques, convert personal loans into fixed-term structures, and strictly verify that credit is utilized for its stated purpose. The regulations enforce strict credit-to-deposit ratios, align loan interest rates with the central discount rate, enhance collateral requirements, and mandate regular external audits of derivatives alongside detailed periodic reporting on housing finance and SME rescue programs.
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