Regulatory Alerts2010-11-01
Regulations Governing Islamic Banks Purchase of Their Own Shares
The Central Bank of Kuwait, alongside the Ministry of Commerce and Industry, establishes comprehensive regulations governing Islamic banks' purchase of their own shares. Banks must secure prior Central Bank approval to acquire up to 10% of their equity using only available reserves rather than capital, while freezing an equivalent amount to cover potential risks. The framework mandates strict accounting treatments, including specific balance sheet disclosures, the suspension of cash dividends on treasury shares, and detailed quarterly and annual reporting to ensure transparent financial management.
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