- Al-Hashil: the new rules have been reviewed by a global consulting firm based on wage changes and inflation
- Maximum consumer loan 25 times the salary and the monthly premium Do not exceed 40% for employees And 30% for retired people
- The new rules take into account the real needs of customers and are designed to reduce the excessive use of loans
- "Central" stressed the banks advising customers and sensitizing them the nature of their monthly obligations
- Maintain a maximum of 70 thousand dinars for real estate loans and Islamic finance operations
- Calculation of the monthly payment ratio based on the net monthly salary plus the only support to work
- 95,000 dinar total loans can be obtained from the citizen provided the premiums do not exceed 40% of the monthly salary
The Central Bank of Kuwait has always provided a model for crisis management in a different way by taking preventive measures before crises occur, and the Central Bank differs from the rest of Kuwait government bodies without exception, which failed in the rain test in Kuwait.
The preventive strategy of the Central Bank of Kuwait was reflected in the decisions issued yesterday, which increased the maximum amount of consumer loans and not to bill invoices except for home loans, which help banks to absorb 39. Excess liquidity.These decisions are part of the monetary policy of the Central Bank of Kuwait to absorb that liquidity in banks in different ways initiated by the Bank To set the discount rate on loans and increase the yield of the bonds of Tawarruq, using all the its tools to prevent crisis prevention in the banking sector of Kuwait.
The new instructions of the Central Bank of Kuwait include:
– Increase the maximum amount of loans and Islamic financing transactions for consumption purposes to become an independent limit no higher than 25 times the client's monthly net salary and a maximum of 25 thousand dinars.
– Maintain the maximum amount of Islamic loans and financing for residential purposes of 70 thousand dinars.
– The total amount that can be obtained by the client from loans and Islamic financing of 95 thousand dinars in case of compliance with the other conditions prescribed in the instructions.
– The monthly installments of the clients must not exceed 40% of the net salary for the employees and 30% of the pensioners.
– The non-dependency on monthly income and to limit the calculation of the monthly payment on the monthly net salary plus the support for work.
Decisions … well thought out
Kuwait Central Bank Governor (CBK) Mohammed Al-Hashil said in a press release that in the interest of the Central Bank of Kuwait regularly review its instructions and regulatory controls in light of economic developments and banking and related changes to the objectives of these instructions and the results of their applications, the Central Bank, in collaboration with a global consulting firm, has examined and studied the instructions issued on the rules and bases for the granting of loans and the financing of consumer goods and consumers.
The study took into account the changes in macroeconomic performance indicators from the last adjustment to the maximum limits for these loans in 2004, including changes in population growth rates, inflation rates, and the increase in durable goods and consumers and the increase in wages and salaries, A wide range of citizens and residents and their relative importance in the loan and finance portfolios of both banks and finance companies with the importance of controlling the growth of these loans in order to maintain monetary stability and financial stability.
Adjustment and not overeating
"Based on the results of the study and the evidence of the application of the alternatives presented and the most important observations revealed by the follow-up of the Central Bank of Kuwait to the practice of granting this type of loan and financing operations, the Central Bank of Kuwait has issued new instructions on the rules and bases of the granting of personal loans and loans for consumption and housing purposes, Credit Cards ».
The new regulations are aimed at regulating the granting of loans to banks, investment companies and finance companies on the basis of the actual needs of customers, with the aim of limiting the excessive use of these loans as part of the strengthening of the principle flexibility and balance in order to preserve the rights of the parties.
The billing era is over
The new instructions require the customer to present documents and invoices that show the use of Islamic loans or finance in the purpose assigned to him, unless the purpose is to build or restructure a personal or buy a private residence. donor.
In the case of reorganization of the terms of the contract, which involve the early repayment of Islamic finance, the instructions required the donors to waive the amount of the return due for the remaining period for Islamic finance paid, as well as for the traditional parts that the instructions did not have to be debited in this case.
A bank is obliged to educate the borrower
The directives of the Central Bank of Kuwait (CBK) took into account the rights of clients and transparency requirements, stating that donors of Islamic loans or finance should provide financial advice to clients and determine the nature of their monthly obligations and their burdens . In the case of changing the financial conditions for them when the change of work or retirement.
The instructions also included a section on credit cards that includes previously issued regulations on strengthening fraud control systems and improving the security of credit card information.
The fact that the new instructions represented a complete reference to all relevant controls was taken into account.
It will be implemented from next Wednesday, corresponding to November 14, 2018, and cancels the work of the previous instructions in this regard.