Kuwait Banks settlement operations dip 7.5%, transaction volumes surge

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Checks transaction witnessed a 9.8 percent drop

KUWAIT CITY, Sept 7: The banking landscape in Kuwait has witnessed notable shifts in settlement operations and check transactions. In July, local banks experienced a 7.5 percent decline in settlement operations, resulting in a total of 1.589 billion dinars. Over the past year, these operations saw a signifi- cant annual decrease of 15.5 percent, amounting to 3.616 billion dinars. The trend continued throughout the first seven months of 2023, with a substantial 20.3 percent reduction, totaling approximately 37 billion dinars. Various factors contributed to this decline, including a 5.2 percent drop in new credit facilities provided during 2022. In terms of checks between banks, while total deposits increased by 1.5 percent over the initial seven months of 2023, a monthly decline of 0.5 percent was observed in July, amounting to about 240 million dinars. Notably, the value of checks exchanged between banks showed a 4 percent growth in July but registered an 8 percent decrease for the entire first seven months of 2023, reaching 9.972 billion dinars.

Transaction
volumes Transaction volumes painted a different picture, as the number of check settlements surged by 7.7 percent in July and experienced an impressive 23.5 percent annual growth, with 202.2 thousand transactions recorded in July 2023. Over the first half of 2023, the number of settlement transactions increased by 3.8 percent, totaling 1.42 million transactions. Lastly, the average transaction amount for checks decreased by 3.4 percent in July and witnessed a 9.8 percent drop compared to July 2022, settling at 6.79 thousand dinars. These operations are facilitated by Kuwait’s Electronic Check Clearing System (KECCS), where checks are electronically cleared between local banks. The Central Bank of Kuwait plays a pivotal role in KECCS, overseeing its operation and serving as the government bank, collecting checks for government agencies. Regulatory rules have been established to govern KECCS, ensuring a structured framework for all participating entities and their interactions within the system. By Ahmad Fathi Al-Seyassah Staff

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