CBK is­sues new rules for per­sonal loans, fi­nanc­ing

Kuwait Times - - Front Page -

KUWAIT: The Cen­tral Bank of Kuwait yes­ter­day is­sued new reg­u­la­tions for grant­ing loans and per­sonal fi­nanc­ing for con­sumer and hous­ing pur­poses and is­suance of credit cards. Gov­er­nor Dr Mo­ham­mad Al-Hashil told KUNA that the new in­struc­tions come within the frame­work of the Cen­tral Bank’s in­ter­est in reg­u­larly re­view­ing its in­struc­tions and reg­u­la­tory con­trols in light of eco­nomic and bank­ing de­vel­op­ments.

In this re­gard, the bank, in co­op­er­a­tion with a global con­sult­ing com­pany, re­viewed the in­struc­tions is­sued on the mech­a­nisms of grant­ing loans and other fi­nanc­ing op­er­a­tions. He added that the study took into ac­count changes in macroe­co­nomic per­for­mance in­di­ca­tors since the last ad­just­ment to the max­i­mum lim­its of these loans in 2004, in­clud­ing changes in pop­u­la­tion growth rates, in­fla­tion rates and ris­ing prices of con­sumer and durable goods.

The in­crease in wages and salaries was also re­flected in light of the loans’ con­nec­tion to a large seg­ment of cit­i­zens and res­i­dents, and their rel­a­tive im­por­tance in the lend­ing and fi­nanc­ing port­fo­lios of both banks and fi­nance com­pa­nies, with the im­por­tance of con­trol­ling growth in these loans to main­tain mone­tary and fi­nan­cial sta­bil­ity. Hashil added that based on the find­ings of the study and tests of the ap­pli­ca­tion of al­ter­na­tives and the most im­por­tant ob­ser­va­tions re­vealed by the Cen­tral Bank of Kuwait to prac­tice the grant­ing of these types of loans and fi­nanc­ing op­er­a­tions, the bank is­sued new in­struc­tions for grant­ing loans and per­sonal fi­nanc­ing for con­sumer and hous­ing pur­poses and the is­suance of credit cards.

The new reg­u­la­tions aim at reg­u­lat­ing the grant­ing of loans by banks, in­vest­ment and fi­nanc­ing com­pa­nies based on the ac­tual needs of cus­tomers and aimed at re­duc­ing the ex­ces­sive use of these loans in the frame­work of strength­en­ing the prin­ci­ple of flex­i­bil­ity and bal­ance in a way that pre­serves the rights of the two par­ties. Hashil pointed out that these in­struc­tions in­clude in­creas­ing the max­i­mum amount of loans and Is­lamic fi­nanc­ing op­er­a­tions for con­sumer pur­poses to a limit not ex­ceed­ing 25 times the net monthly salary of the client and a max­i­mum of KD 25,000 ($82,000).

He con­cluded that in terms of loans and Is­lamic fi­nanc­ing op­er­a­tions for hous­ing pur­poses, the max­i­mum limit re­mained KD 70,000 ($231,000). Thus the to­tal amount that can be ob­tained by a cus­tomer in loans and Is­lamic fi­nanc­ing is KD 95,000 ($313,000), ad­her­ing to other reg­u­la­tions. — KUNA

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