KUWAIT CITY, Nov 10, (KUNA): The Central Bank of Kuwait (CBK) on Saturday issued new regulations for granting loans and personal finance for consumer and housing purposes and issuance of credit cards.
CBK Governor Dr Mohammad Al-Hashil told Kuwait News Agency (KUNA) that the new instructions came within the framework of the Central Bank’s interest in regularly reviewing its instructions and regulatory controls in light of economic and banking developments.
In this regard, the Bank, in cooperation with one of the global consulting companies, reviewed the instructions issued on the mechanisms of granting loans and other financing operations.
He added that the study took into account changes in macroeconomic performance indicators since the last adjustment to the maximum limits of these loans in 2004, including changes in population growth rates, inflation rates and rising prices of consumer and durable goods.
The increase in wages and salaries was also reflected in the increase in salaries in light of the loans’ connection to a large segment of citizens and residents, and their relative importance in the lending and financing portfolios of both banks and finance companies, with the importance of controlling growth in these loans to maintain monetary and financial stability.
He added that based on the findings of the study and tests of the application of alternatives and the most important observations revealed by the Central Bank of Kuwait to practice the granting of this type of loans and financing operations, the Bank issued new instructions for granting loans and personal financing for consumer and housing purposes and the issuance of credit cards.
The new regulations aim at regulating the granting of loans by banks, investment and financing companies based on the actual needs of customers and aimed at reducing the excessive use of these loans in the framework of strengthening the principle of flexibility and balance in a way that preserves the rights of the two parties.
He pointed out that these instructions included increasing the maximum amount of loans and Islamic financing operations for consumer purposes to become an independent limit not exceeding 25 times the net monthly salary of the client and a maximum of KD 25,000 (about $82,000).
He concluded that in terms of loans and Islamic financing operations for housing purposes, the maximum limit remained KD 70,000 (about $231,000). Thus, the total amount that can be obtained by the customer from loans and Islamic financing is KD 95,000 (about $313,000) once adhering to other regulations.