Regulatory Alerts2007-12-31
Rules and Regulations for Consumer Finance Transactions and Personal Installment Finance
The Central Bank of Kuwait establishes comprehensive rules for Islamic banks and investment companies extending consumer finance and personal installment loans, setting maximum limits of KD 15,000 for consumer finance and KD 70,000 for personal installment finance. The regulations cap total monthly installments at 40 percent of a borrower’s net salary (or 30 percent for pensioners), mandate verification through the Ci-Net database, and restrict balloon payments and rescheduling periods to protect borrower burdens. Banks must submit monthly reports detailing loan categories, legal actions, and compliance data while ensuring external auditors verify rectified violations before the instructions take full effect.
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