KUWAIT CITY, March 12: The legislative and executive authorities have reached an agreement that seeks to end the problematic issue of citizens’ loans and loan interests on Tuesday.

The authorities are preparing a draft bill that will allow “defaulting debtors from before March 30, 2008 to join a government-funded defaulters’ fund that will pay-off their entire principal loans to banks which will automatically drop the loan interests”, said MP Yousef Al-Zalzalah, chairman of the Financial and Economic Affairs Committee. “The debtors will then pay-off their debt in rescheduled installments to the state fund,” he added.

Al-Zalzalah described Tuesday’s meeting with Minister of Finance Mustafa Al-Shammali as “highly fruitful” and said the government showed “unprecedented cooperation” to end the problem of loans. Another meeting will be held by on Sunday to finalize a draft law that is expected to be on the agenda of the upcoming parliament session for discussion, he added.

Harmed
Al-Zalzalah stated that those who’ve taken loans during this period were harmed due to the absence of Central Bank of Kuwait requirements and regulations in regards to loans and loan interests. He said the “regulations of the Kuwait’s Central Bank were issued on March 24, 2008 and were obliged on the banks on March 30”.

On his part, Al-Shammali stated that there is “an understanding on the highest level” in regards to the problem of loans and incurred interests before March 30, 2008. He said the problem will be addressed with a new law and that both parties agreed to form a joint technical legal committee to study and finalize the bill for another meeting on Sunday.

Al-Shammali added that both parties will conclude everything related to the problem and “to offer everything citizens need to facilitate their lives.” He stated that “after this issue is resolved there are no problems with loans, especially after the Central Bank’s regulations issued on March 24, 2008”.
Clarified

MP Safa’ Al-Hashem, who is rapporteur of the financial committee, further clarified that the law will be obligated on all involved parties to implement and is agreed upon in the presence of the Governor of Central Bank of Kuwait who gave “the go ahead” with the bill. She praised the efforts of the Governor and the Minister of Finance to comprehensively end the problems of “66,555 loans during the period of Jan 1, 2002 to March 30, 2008”.

“These loans will be considered by the fund. The state will buy the principle loans and therefore the interests will be dropped automatically and the citizen will pay-off the debt to the state in installments with almost zero interest,” she explained.

Meanwhile, MP Askar Al-Enezi said in a press statement that there is another proposal by lawmakers that seeks to give KD 1,000 grants to defaulters that have taken out loans after March 30, 2008, who are not part of the new bill. “This proposal is with HH the Amir”, he stated.