KUWAIT CITY, March 20: MP Nawaf Al-Fuzai has said the recent cancellation of loans interests was only intended to reward the banks for their mistakes and violations while taking advantage of the citizens, since the bill did not specify the sum taken illegally from citizens as interests by the banks.

At a seminar dubbed “Who benefits from cancellation of loans” and organized by Justice and Peace Bloc, Al-Fuzai demanded the Central Bank to impose unjustifiable loans interests on the banks, as per resolution issued on March 24, 2008. He affirmed whoever erred must be made to account for his action.
MP Khaleel Al-Saleh considered the loans issue as unprecedented in the country, adding the problem lies with debtors, creditors and Central Bank that supervised the procedures.

For his part, MP Al-Saleh reiterated that the banks sought all means to entice the public to take loans using several facilities and advertisements, adding the Central Bank also slacked in performing its monitoring role on the banks’. As a result the banks took advantage of the situation to the extent of violating the principles set by Central Bank for loans, wherein loans interests surpassed the principal amount of loan collected. He stressed the need to resolve the loans issue in a fair manner to avoid social crisis.

Expert
Meanwhile, economy expert Jamal Abdulrahim said the importance of adopting the culture of accountability, which he stressed, appears to be absent in the country. He affirmed that any country not observing accountability will end up like Colombia. He sees the cancellation of loans as ‘first class ethical crime’ against the people of Kuwait, indicating the move may trigger irrational increase of prices of commodities, and the public will face serious suffering in the end.

He pointed out that United States held the banks and major establishments accountable by imposing huge fines on them for financial crisis and damages they helped to create at the expense of its clients, indicating the banks in Kuwait had failed to implement risk management on consumer loans, lest their clients would go to other banks.

Earlier, Chairman of Parliamentary finance and economic committee MP Dr Yousef Al-Zalzala praised His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah for instructing Deputy Premier and Finance Minister Mustafa Al-Shamali to find a solution to the issues, to attain justice without undermining the public purse.

Reacting to remarks by minister Al-Shamali and some MPs during Tuesday’s session, Al-Zalzala added that drafting of this law was achieved through marathon meetings by the committee members and in presence of Al-Shamali, Mohammad Al-Hashel, Governor of the Central Bank of Kuwait (CBK), and number of CBK’s senior officials.