Central Registration System for Customers Whose Accounts at Local Banks Were Closed

20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED A) Instruction concerning the Central Registration System for Customers whose Accounts with local Banks were closed due to Cheques returned for being without Provisions, and the Rules and Proceduresto be applied in this Regard. B) Circular concerning the Replacement of Tables containing the Current Branch Codes, with New Tables related to the Central Registration System for Customers whose Accounts with local Banks were closed. C) Circular concerning Discontinuation of submitting Statements to the Central Registration System by Mail for Customers whose Accounts with local Banks were closed due to Cheques Returned for being without Provisions, effective from the second half of 2011, and Submission of only the Statement received through the Direct Communication Line. D) Circular concerning the Development of the Auto-System to receive Data for the Central Registration System, for Customers whose Accounts with local Banks were closed due to Cheques Returned for being without Provisions, by Using the Oracle Applications instead of the Main Frame. E) Circular No. (2/BS, IBS/318/2013) concerning the Development of the Automated Central Registration System for Returned Cheques.

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED. THE GOVERNOR Muharram 26, 1420 H May 12, 1999 The Chairman of the Board of Directors, Circular to all Local Banks I would like to inform you that the Board of Directors of the Central Bank of Kuwait has, in its meeting on 09/05/1999, issued instructions concerning the central registration system for customers whose accounts at local banks were closed due to cheques returned for being without provisions, and the rules and procedures to be applied in this regard. This system shall apply after completion of its automation and testing processes at the Central Bank of Kuwait. Attached hereto is a copy of these instructions. You will be further notified of the start of application of these instruction after completion of the mentioned processes. Your bank shall start, on its part, to take necessary action in preparation for the implementation of these instructions, particularly with regard to the required database and the policy adopted for dealing with customers whose cheques are returned. With my best wishes, The Governor Salem Abdul Aziz Al-Sabah

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED. Instructions Concerning the Central Registration System for Customers Whose Accounts at Local Banks were Closed due to Cheques Returned for being Without Provisions, and the Rules and Procedures to be Applied in This Regard With a view to ensuring the proper use of bank cheques, limiting the increase in number of cheques returned for being without provisions, enhancing trust in cheques as a payment instrument along with avoiding the negative impact which the misuse of cheques has on transactions; and, within the framework of upgrading the relevant system currently followed by the banks and Kuwait Finance House, and to attain an adequate measure of uniformity and organization among banks in this regard, the Board of Directors of the Central Bank of Kuwait (CBK) has decided to establish an automated central information system at the Central Bank of Kuwait, in regard to customers whose accounts at local banks Kuwait Finance House were closed due to cheques returned for being without provisions, and for the issuance of rules and measures to be applied by the local banks and the Kuwait Finance House in dealing with these customers, as follows:
First : Central registration system

1. A central registration " system shall be established at the Central Bank
   of Kuwait for customers whose accounts at local banks were closed due to cheques returned for being without provisions, " and shall be referred to hereinafter as “the System’’. Participants in the system encompass local banks, Kuwait Finance House and any other banks that may be licensed in the future, are referred to hereinafter as “the Banks".
2. The System shall have a function to establish " a list of customers
   whose accounts were closed due to cheques returned for being without provisions, " referred to hereinafter as "the List".
3. The banks shall supply the system through on-line connection with the
   Central Bank of Kuwait, with the following information on customers whose accounts were closed due to cheques returned for being without provisions, on the same day the account is closed:

• Name of customer; civil card number for individuals, and commercial
  registration number for companies and establishments.
• The number of account that has been closed.
• Code of concerned branch.
• Number and date of each returned cheques on the basis of which the
  account was closed.
• Date the account was closed.
• The reason the account was closed.

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED.
4) The on-line system shall be used to input information or for viewing
the list provided by the system according to the procedures and controls listed below:
a) Banks shall provide the supervision department at the Central Bank of Kuwait with a list of names, job titles and specimen signatures of persons authorized to use the on-line connection for entering data into the system or for viewing the list provided by the system. This authorization shall be limited to four officials from the competent department at each bank. b) The supervision department at the Central Bank of Kuwait shall allow those employees authorized by their banks to use the System, with the following:

• Screen identification and numbering.
• Issuance of password for authorized employee to use the on-line
  system.
  Second : Rules and procedures to be implemented:

1. All customer’s checking accounts shall be closed and the name thereof
   entered into the list if, within one year, a maximum three cheques made by the customer are returned for being without provisions, or if the bank finds ill-intent on the customer’s part, resulting into non-clearance of the cheque. The customer’s name shall remain on the list for one year before removal therefrom. Banks shall request customers, whose accounts were closed, to return to the bank the unused cheques still in their possession.
2. A bank may not open new checking accounts or issue new cheque
   books for customers recorded in the list, whether they were so recorded by that bank or by any other bank.
3. Banks shall close the account of any customer recorded in the list by
   other banks, in the event where one cheque drawn on the customer's bank account is returned for being without provisions.
4. Where a cheque is returned for being without provisions, banks shall
   serve the issuing customer a warning, underlining the penalties applicable to cheques returned for being without provisions, and stating that the cheque so returned will be counted as returned cheques under Item No. 1 of these rules and procedure, regardless of the returned cheque having been settled.

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED.
5) Banks shall print and affixed to cheque books a sheet bearing a
reminder of the penalty applicable under the Kuwaiti Penal Code for issuing cheques without provisions, and the measures taken accordingly in this regard.
6) When opening a checking account, the bank shall obtain from the
customer, a written and unconditional consent to the application of these instructions, as well as any other measures dictated by the bank’ policy regarding cheques drawn on it and returned for being without provisions. Banks shall obtain a similar consent from their existing clients for which they opened checking accounts, within six months from the application of this System. The rules and procedure mentioned above are the minimum applicable by banks in dealing with customers whose cheques are returned for being without provisions. Banks are each entitled to apply further stricter measures, according to the bank's policy in this regard and in the light of the customer's behavior in dealing with cheques. Third: General instructions

1. Banks shall lay down internal regulations that ensure the confidentiality
   of data and information provided in this System, and prevent their misuse. Furthermore, banks shall advise authorized employees that disclosure or misuse of such data and information will subject them to the penalties provided for in the relevant laws.
2. The Central Bank of Kuwait shall be provided periodically with
   information on cheques that are returned for being without provisions, according to the attached form, on a six-monthly basis (end of June and December of each year), provided that such data be extracted from the system on-line and endorsed by the bank’s management, and reach the Central Bank of Kuwait within one week from the end of the period covered by the statement. The first such statement shall be accompanied with a detailed description of the bank’s policy with regard to customers whose cheques are returned for being without provisions. (1)(2)

(1) To avoid duplication of the submitted data, it has been decided to discontinue the data received by mail starting the second half of 2011 according to circular dated 28/11/2011 listed under Item (C) of this chapter (2) The auto-system receiving data from local banks has been developed by using the Oracle applications instead of the Main Frame according to circular dated 03/05/2012 listed under Item (D) of this chapter.

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED. Banks shall set up an adequate in-house database containing information on clients whose cheques were returned, so as to allow verification of the position of these clients at any time, and to provide the Central Bank of Kuwait with necessary information in this regard.

Statement of Cheques Presented to the Bank(1) and those Returned for being without Provisions During the Period…………………………………… Bank name: ……………………………… KD Thousand Description Total cheques presented to the bank(2) Total cheques returned for being without provisions(2) Accounts closed because of Cheques without provisions Amount Number No. of Customers(3) Amount Number No. of Customers(3) Number of Customers Number of Accounts Total ________________________________________________________ (1) Includes the head office and branches inside Kuwait . (2) Whether presented at the counter or through the clearing room . (3) Duplication should be avoid in the listing of customers .
CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
A)
CLOSED.
CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE Instruction concerning the Central Registration System for customers whose accounts at local banks were closed due

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED. THE EXECUTIVE DIRECTOR Thul-Hijja 04, 1429 H December 02, 2008 The General Manager, Circular to all Local Banks Including Foreign Branches With reference to the Central Registration System for customers whose accounts were closed due to cheques returned for being without provisions, the rules and procedures applicable thereto, and the related codes of branches where such accounts have been closed, we would like to inform you that the current branch code lists have been replaced with new lists (attached) effective the beginning of working day of 02/12/2008. Best Regards, The Executive Director, Supervision Sector Dr. Mohammad Yousef Al-Hashel

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED. Capital Governorate (100) Code Area Code Area 101 Kuwait City 116 Adailiya 102 Dasman 117 Faiha 103 Sharq 118 Shamiya 104 Qiblah 119 Keifan 105 Bneid Al-Qar 120 Khaldiya 106 Dasma 121 Yarmuk 107 Murqab 122 Shuwaikh (Residential) 108 Da’iya 123 Shuwiakh (Industrial) 109 Qadissiya 124 Mina Shuwaikh 110 Mansouriya 125 Shuaikh (Educational) 111 Dahiat Abdallah Al-Salem 126 Shuwaikh (Medical) 112 Nuzha 127 Mubarkiya Camps 113 Rawda 128 Garnata 114 Surra 129 Sulaibikhat 115 Qurtuba 130 Doha 131 Salhiya

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED. Hawali Governorate (200) Jahra Governorate (300) Code Area Code Area 201 Salmiya 301 Sulaibiya 202 Rumaithiya 302 Al-Qasr 203 Salwa 303 Al-Naim 204 Mishref 304 Tayma’a 205 Dahiat Abdallah Al￾Mubarak 305 Al-Nasim 206 Bayan 306 Jahra Industrial 207 Jabriya 307 Al-Oyoun 208 Hawalli 308 Al-Waha 209 Shaab 309 Jahra 210 Salam 211 Hitteen 212 Al-Shuhada 213 Zahra’a 214 Siddeeq

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED. Mubrak Al-Kabeer Governorate (400) Farwaniya Governorate (500) Code Area Code Area 401 Sabah Al-Salem 501 Abraq Khaitan 402 Messila 502 Al-Amriya 403 Funeitees 503 Farwaniya 404 Abo Fatira 504 Al-Dajeej 405 Addan 505 Rabia 406 Al-Qosour 506 Rihab 407 Al-Qurain 507 Eshbiliya 408 Mubarak Al-Kabeer 508 Al-Rai 409 Subhan 509 Jileeb Al-Shoyoukh 510 Airport 511 Al-Rig’ai 512 Ardiya 513 Andalus 514 Fardous 515 Sabah Al-Salem

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED. Ahmadi Governorate (600) Code Area 601 Fintas 602 Mahboula 603 Abo-Halifa 604 Mangaf 605 Fahaheel 606 Shuaiba 607 Mina Abdallah 608 Umm Al-Haiman 609 Aqeela 610 Al-Riqa 611 Dahiat Fahad Al-Ahmad 612 Al-Sabahiya 613 Ahmadi 614 Hadiya 615 Jaber Al-Ali 616 Al-Dahar

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED. C) Circular concerning Discontinuation of submitting Statements to the Central Registration System by Mail for Customers whose Accounts with local Banks were closed due to Cheques Returned for being without Provisions, effective from the second half of 2011, and Submission of only the Statement received through the Direct Communication Line. THE EXECUTIVE DIRECTOR Muharram 03, 1433H November 28, 2011 The General Manager, Circular to all local Banks Reference is made to the decision of the Central Bank of Kuwait’s Board of Directors dated 09/05/1999 concerning the instructions related to the Central Registration System for customers whose accounts with local banks were closed due to cheques returned for being without provisions, and the applicable rules and procedures, whereby the Central Bank of Kuwait (CBK) must be provided with the required statements through mail, while the same statement is concurrently received through the Direct Communication Line (on-line). To avoid duplication of the submitted data, it has been decided that submission of the mentioned statements received through mail shall be discontinued effective from the second half of 2011. Best Regards, The Executive Director, Supervision Sector Yousef J. Al-Obaid

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED. D) Circular concerning the Development of the Auto-System to receive Data for the Central Registration System, for Customers whose Accounts with local Banks were closed due to Cheques Returned for being without Provisions, by Using the Oracle Applications instead of the Main Frame. THE EXECUTIVE DIRECTOR Jumada Al-Akhira 12, 1433H May 03, 2012 The General Manager, Circular to all local Banks With reference to the Circular of the Central Bank of Kuwait (CBK) dated 12/05/1999 concerning the instructions related to the Central Registration System for customers whose accounts with local banks were closed due to cheques returned for being without provisions, and the applicable rules and procedures, we would like to inform you that an automated system for receiving data from local banks has been developed by using the Oracle applications instead of the Main Frame according to the attached User Manual (CD), which includes operating guidelines. Banks are required to submit the daily data on-line effective from 01/07/2012. In addition, your bank must submit the historical data according to the new system (Oracle) starting from the beginning of 2011 and no later than 30/06/2012. You are also require to provide us with such data on both Oracle and Main Frame systems on the due dates for a transitional period and you shall be notified later of the date on which you shall discontinue submission of data on the Main Frame system. (1) Best Regards, The Executive Director, Supervision Sector Yousef J. Al-Obaid

(1) Circular No. (2/BS,IBS/318/2013), listed under Item (E) of this chapter, issued on 09/12/2013 concerning developing of an auto-system for the central registration system for customers whose accounts with local banks have been closed due to returned cheques. This circular set the date for discontinuation of submitting data through the Main Frame system.

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
20- CENTRAL REGISTRATION SYSTEM FOR CUSTOMERS WHOSE ACCOUNTS AT LOCAL BANKS WERE CLOSED. E) Circular No. (2/BS, IBS/318/2013) concerning the Development of the Automated Central Registration System for Returned Cheques. THE GOVERNOR Safar 05, 1435H December 08, 2013 The Chairman of the Board of Directors, Circular No. (2/BS, IBS/318/2013) to all local Banks concerning the Development of the Automated Central Registration System for Returned Cheques Reference is made to the Circular of the Central Bank of Kuwait (CBK) dated 03/05/2012 concerning the development of the automated Central Registration System for returned cheques to receive data from local banks through the Oracle application instead of the Main Frame system according to the CBK’s circular dated 12/05/1999 concerning the instructions related to the Central Registration System for customers whose accounts with local banks were closed due to cheques returned for being without provisions, and the applicable rules and procedures. We would like to inform you that you must discontinue providing us the Central Registration System data for the returned cheques on the Main Frame effective from 01/01/2014, and provide us with such data effective from the mentioned date through Oracle as per the enclosed manual, which includes the operating guidelines.(1) With my best Regards, The Governor Dr. Mohammad Y. Al-Hashel

(1) Local banks were provided with the English version of the User Manual.