‘Customer needs to transfer salary to lending bank’
KUWAIT CITY, Aug 29: The commercial banks in Kuwait have begun the policy of burning interest rates on personal loans, specifically consumer loans, with the possibility of doing away with a part of the installment, reports Al-Rai daily. The daily quoting sources said “a number of banks, including traditional and others operating in accordance with Islamic law, have started marketing their loans to new customers of between 25 and 40,000 dinars, without interest in the form of good loans, in addition to other benefits.
The sources pointed that “one of the most important conditions for obtaining the goodwill loan exceptionally available only to Kuwaiti employees whose salary is transferred to the lending bank and provided the applicant is in a position to honor his/her commitment towards the loan, meaning he/ she has no other financial commitments or is in a position to pay the loan installment.
The source explained the loan applicants must have not postponed the payment of their loan installments due to the repercussions of corona pandemic given that the bank can build a solid long-term credit relationship with such applicants. The sources stated that “in the past, there were one or two banks that granted good loans out of social responsibility and for various reasons, but this move remained on a small scale, with a low credit ceiling,” noting that the banks “are now adopting a collective practice that enhances their tendency towards expansion and raising the credit limit without benefit.” Meanwhile, banks have started implementing competitive loan interest rates for personal loans calculated on a reducing balance basis, specifically consumer loans, with the possibility of expanding it to include part of the installment, reports Al-Rai daily quoting sources.
Sources confirmed a number of banks, including traditional and those operating in accordance with Islamic Law, have started offering loans to new customers — ranging from KD25,000 to KD40,000 without interest; provided they are in the form of good loans, in addition to other offers that include incentives and discounts for account transfers. Sources disclosed “one of the most important conditions for obtaining a good loan, which is offered only to Kuwaiti employees, is that the customer transfers his salary to the lending bank; as well as having appropriate lending space, meaning he did not reach the loan amount limit.” Sources pointed out “priority is given to Kuwaiti employees who were appointed in the last two years and did not postpone the payment of their existing loans due to the repercussions of corona, given that the lending bank can build a solid long-term credit relationship with them.”