KUWAIT CITY, Jan 17: The new banking regulations forced some banks to stop giving installment loans worth KD 70,000 to expatriates, and restricted their financial transactions for car loans and other consumable commodities, although no instructions were given specifically regarding the issue, reports Al-Rai daily.
The daily quoting sources said the Central Bank has specified the maximum ceiling for consumable loans at KD 15,000 in order that the total monthly deductions will not exceed 40 percent of the loanee’s salary. They explained the State’s banking policies and regulations don’t make a distinction between a citizen and an expatriate, but installment loans are set aside for a stable private housing system inside Kuwait and it cannot be commercialized in real estate or investment.
Therefore, expatriates will not be able to obtain housing loans since real estate ownership is not accessible to expatriates. “Throughout the years, the banks were giving installment loans to expatriates to spend it the way they wanted based on their commitment to pay back.
The system was possible because the customer was not required to bring any bill or provide evidence for the purpose of obtaining the loan, but the customer since last Oct is required to provide receipts of the items purchased within six months, so the banks stopped giving installment loans to expatriates.