Regulatory Alerts2003-08-18
Discount and Rediscount System of Commercial Papers
The Central Bank of Kuwait established comprehensive rules governing the discount and rediscount system for local banks, mandating that eligible commercial papers be denominated in Kuwaiti Dinar, mature within one year, and carry valid serial endorsements. The regulations standardize the declaration of attached data through a unified format and grant the Central Bank full discretion to accept or reject papers originating from overdraft facilities based on their discount policy. Furthermore, the framework empowers the Board of Directors to set and adjust maximum discount limits and sector-specific interest rates while enforcing penalty charges on banks that delay covering debit balances arising from these transactions.
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