Retirees' loan leeway jumps to 40 percent

KUWAIT CITY, Nov 12: The Central Bank of Kuwait has increased the maximum monthly loan installment for retirees from 30 percent to 40 percent of their net pension, reports Al-Seyassah daily. The decision was announced in a circular sent to all local banks, investment companies and finance companies, following approval by the Board of Directors of the Central Bank of Kuwait at its meeting on Nov 11, 2026. The circular stated the following: “Further to the instructions issued on Nov 11, 2018, and amended on May 28, 2023, and June 17, 2025, concerning the rules and regulations governing consumer and housing loans, personal financing and credit card issuance, the Board of Directors of the Central Bank of Kuwait, at its meeting held on Nov 11, 2026, decided to amend these instructions by increasing the maximum monthly installment-to-net-salary ratio for retirees from 30 percent to 40 percent.”

Accordingly, all provisions relating to the maximum monthly installment ratio in the following sections, chapters and clauses have been amended to apply to all clients, whether employees or retirees:

■ Part One, Chapter One, Section Two, Clause 3, concerning the monthly installment-to-net-salary ratio.

■ Part One, Chapter Two, Section One, Paragraph Two of Clause 13(b), concerning the collection of insurance fees.

■ Part One, Section Two, Chapter Two, Item (a), concerning amendments to loan or financing periods and monthly installment amounts.

Part One, Section Two, Chapter Two, Item (c), concerning the restructuring of contractual terms for retired clients. Part Two, Section Two, concerning the maximum credit limits issued by local banks. The circular stressed that banks, investment companies and finance companies must conduct a comprehensive credit assessment of retired clients when granting loans or financing facilities.

The assessment must include details of the financial impact of the loan or financing facility, as well as the remaining net pension available to the client throughout the repayment period. Financial institutions must also fully inform clients of the assessment results and its financial implications.