KUWAIT CITY, Aug 17: Kuwaiti banks have escalated measures against individuals whose nationalities have been revoked, moving from restricting their accounts to freezing them entirely, according to banking sources this move prohibits the affected individuals from accessing their balances, whether in deposits or current accounts until they amend their residency status.

The sources explained that the banks receive continuous updates from the relevant authorities regarding individuals whose nationalities have been withdrawn. Upon receiving this information, banks immediately begin identifying and flagging these individuals within their systems. Initially, banks restricted these accounts, halting the renewal or issuance of bank cards, and preventing the account holders from accessing loans or receiving deposits. However, they were still allowed to withdraw any existing balances, provided they agreed to close their accounts—a procedure traditionally applied to stateless individuals (Bedoon) whose civil data has not been renewed.

In a significant development, banks have now started freezing the accounts of individuals whose nationalities have been revoked. This means that these individuals are not only subject to the previous restrictions but are also prohibited from withdrawing their balances, even upon request. This measure is intended to ensure that the balances can cover any financial obligations until the customer’s status is resolved or it is confirmed that they do not owe any debts to the banks or the state.

The sources also noted that this stringent approach is not limited to recent nationality withdrawals. Banks are reviewing all accounts of individuals whose nationalities have been revoked in past years to ensure that appropriate precautionary measures were applied. This review extends to individuals whose nationalities were revoked even before the Iraqi invasion, ensuring the integrity of the procedures followed.

When questioned about the potential for credit defaults among this group, particularly those whose nationalities were revoked due to accusations of document forgery or dual citizenship, the sources downplayed the risk. They emphasized that any potential defaults would have a minimal impact on the loan portfolios of local banks, which total nearly 48 billion dinars. The risk is further mitigated by the fact that most installment or housing loans are secured by assets, providing additional guarantees.

Finally, the sources highlighted that individuals whose nationalities may be revoked in the future will be required to update their personal data in the “Know Your Customer” (KYC) forms. This update will include new income estimates and nationality changes, which could significantly impact the assessment of the customer’s financial capacity.