Ratings consequences for interest, loan moves: CBK
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KUWAIT CITY, Jan 23: The Central Bank of Kuwait has confirmed that the application of the proposals to buy loans or drop interest affects the evaluation of Kuwait by international rating institutions, indicating that re-examination of all loan files granted to citizens since 1992 until now affects the reputation of the local banking system, reports Al-Rai daily.
The CBK stated, as part of its vision that it submitted to the Minister of Finance, Abdel Wahhab Al-Rasheed, regarding the proposed law, which aims to form a committee to research and investigate the files of loans granted to citizens since 1992, that there are no legal violations in collecting the benefits of loans that are covered by the target period in Parliament for examination, explaining that this procedure affects legal centers settled under previous legislation.
The regulator indicated that the targeted period included measures that had already been taken, whether based on supervisory instructions or based on the provisions of relevant legal legislation, stressing that there is no actual need to justify legislative intervention by issuing a law regarding recovering illegally obtained interest from banks.
The CBK pointed out that the measures it took regarding the organization and controls for granting personal loans were comprehensive, and that they were examined and audited by independent auditing offices, which demonstrates the effectiveness of the measures taken related to the period specified by the proposal by law to verify banks’ commitment to implementing the regulatory instructions regarding the interest rate on personal loans (consumer and “housing” installments) granted to customers. The CBK noted that long periods have passed since a large part of the loans required to be examined, which extend for up to 30 years, suggesting that documents and records related to all these loans are not currently available at banks
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