Regulatory Alerts2010-04-27
Added · Updated
Instructions Concerning Rules and Regulations for Banks' Extension of Consumer Loans and Other Installment Loans
The Central Bank of Kuwait establishes rules for granting consumer loans, capped at 15 times net monthly salary up to KD 15,000, and installment loans, capped at KD 70,000. Banks must ensure total monthly installments do not exceed 40% of a borrower's net salary or 30% for pensioners, and may not grant loans to individuals against whom legal actions have been taken. Interest rates are limited to 3% over the Central Bank's discount rate, with upfront interest deduction prohibited. The instructions also define maximum repayment periods of five years for consumer loans and 15 years for installment loans, and require monthly reporting of loan data to the Central Bank.