Regulatory Alerts2003-08-18
Rules on Local Banks' Extension of KD Credit Facilities to Non-Resident Customers
The Central Bank of Kuwait has amended instructions to permit local banks to extend KD-denominated credit facilities to non-resident customers without prior regulatory consent, provided individual contracts do not exceed KD 40 million or 70 percent of the total contract value. Lending banks retain full risk and must secure signed letters of assignment, limit financing to real government-awarded contracts, and immediately notify the Foreign Operations Department with detailed project and repayment data. The directive also authorizes forward foreign exchange transactions covering up to 50 percent of contract values while establishing internal per-bank limits that may require banks to halt new extensions once reached.
Share