CBK sets up KD 10m fund to support govt over coronavirus
KUWAIT CITY, March 10: According to Kuwaiti banks, there is no need to postpone the due installments from Kuwaiti debtors, reports Al-Rai daily quoting informed sources.
They explained that all indicators do not reflect the need to postpone the installments due on their scheduled dates. There is no interruption in the salaries of borrowers or they are not exposed to exceptional circumstances that eat up their income in a manner that requires postponing the repayment.
The maximum monthly deduction from salaries does not exceed 40 percent, and 60 percent of the salary remains regular without any change. There is no fundamentally stalled crisis until the banks offer exceptions to repayment. However, the banks believe any postponement in the payment of installments violates the principles of justice, and benefits a limited segment in terms of the payment, and not the majority of ordinary citizens
On the other hand, the banks agreed with the Central Bank of Kuwait’s directive to allow customers to pay from their bank accounts without the need to pass their cards on point-of-sale (POS) devices, and without inputting their secret numbers, by up to KD 25 per transaction.
The banks will address the Shared Electronic Banking Services Company (K-Net) about applying the cash withdrawal service through “contactless” POS devices. This is part of the precautionary measures that banks follow in light of the increasing spread of coronavirus globally, and as an additional measure to provide various necessary preparations and precautions to control the spread of the virus.
The currently allowed limit for withdrawing from bank cards without touching POS devices is KD 10.
The “contactless” technology reduces the transaction time and limits the transfer of the card from one hand to another. To take advantage of this service, cards with this feature are required, which are issued by almost all local banks. The process requires passing the card above the POS devices.
The customer will ensure the transaction is completed by either looking for a green light or hearing a sound signal issued from the point of sale. According to the banking data provided to the supervisory authorities, the withdrawals implemented through points of sale, without the need to pass the bank cards, constitute about 80 percent of the total purchases recorded through POS devices from KD 1 to KD 25.
On the other hand, the monitored data showed that retailers, especially those having direct dealings with customers, recorded a decrease in their sales during the past days by more than 50 percent because of the coronavirus outbreak.
Meanwhile, the Central Bank announced the establishment of a fund worth KD 10 million to be funded by Kuwaiti banks to support the ongoing governmental efforts to combat the spread of coronavirus. In this regard, sources revealed that the banks’ contributions will not be equal, and will be based on the capacity and size of each bank.
They said initial discussions indicate that the contribution of the National Bank of Kuwait (NBK) and Kuwait Finance House (KFH) may constitute more than 50 percent of the total bank donation, which may be approximately KD 6 million.
Governor of the Central Bank of Kuwait Dr Mohammad Yousef Al- Hashel explained that the initiative comes within the framework of ensuring the banking sector carries out its social responsibilities. The initiative is aimed at enhancing role of the private sector in social responsibility and to complement previous efforts in which the banks led the entities under its control to enhance protection and take preventive measures
The governor noted that the fund has been placed at the disposal of the Council of Ministers to disburse the urgent and necessary needs required by various government measures in the face of the spread of the disease. Chairman of the Board of Directors of Kuwait Banking Association Adel Abdulwahab Al-Majed affirmed that the association, based on the initiative launched by the governor to establish a special fund to be funded by Kuwaiti banks for supporting the urgent needs of the government in facing the coronavirus outbreak, responded to the initiative in support of the efforts made by all state institutions in terms of the precautionary procedures and preventive measures to reduce the spread of the virus. He explained that the donation of KD 10 million comes as an interaction from the association under the exceptional circumstances that the country is going through. It is an embodiment of the hoped-for cooperation from all sectors of the state to ensure safety of citizens and expatriates and maintain their health.
Al-Majed highlighted the incessant generosity of Kuwaiti banks throughout the past years and their effective societal contribution to enhance positive impacts on society in line with the principles of social solidarity. He said, “This is what Kuwaiti banks are accustomed to and have put in their strategies and priorities for many years, such that their total social contributions amounted to about KD 588 million during the period from 1992 to 2018.”