Regulatory Alerts2006-01-01
Rules and Regulations for Opening Islamic Bank Branches Within and Outside Kuwait
The Central Bank of Kuwait issued Instructions No. (2/IBS/114/2003) and Circular No. (2/BS, IBS/190/2006) to establish and amend the regulatory framework for local Islamic banks opening branches domestically and internationally. These regulations require applicant banks to submit written applications accompanied by detailed economic feasibility studies, demonstrate capital adequacy and robust internal controls, and complete registration in the Banks Register at least fifteen days prior to commencing operations. The CBK grants initial approvals valid for one year, which may be extended upon justified request before expiry, while evaluating government-initiated branch proposals based on shareholder equity per operating and under-construction location.