Press Releases

H.E. Sheikh Salem Abdulaziz Al-Sabah, the Governor of the Central Bank of Kuwait (CBK) met, on Wednesday the 15th of October 2008, the board chairmen of local banks. The purpose of the meeting was to emphasize the importance of the role played by local banks, in their financial transactions with investment companies, to ensure uninterrupted flow of funds into the economy and reinforce the stability of the financial market. In this meeting, H.E. the Governor underlined a number of important aspects of the banking business, at this stage, which included the following:

1. To maintain and renew existing credit lines to local investment companies, as well as to extend additional required funding to the deserving companies, according to credit appraisal studies carried out by the banks.

2. To hold collateral shares in their possession against loans and facilities extended to their clients, including local investment companies, taking into account the current circumstances and the measures taken by the State and CBK to limit the repercussions of the international financial crisis on the domestic market. It was stressed during the meeting that CBK and other government bodies will refrain from placing deposits with any bank that sells any collateral shares in its possession.

3. To reflect CBK decisions taken on 8 October 2008 in bank procedures by reducing their lending interest rate, and utilize their increased lending capacity brought about by means of raising the maximum ratio of loans to deposits from 80% to 85%, increasing the bank credit growth rate, and allowing the inclusion of real estate into credit risk mitigators. All these CBK measures are aimed to encourage banks to perform their function of facilitating the flow of funds to sustain financial market stability and the economy in general.

4. Local investment companies may now receive financial resources, according to the usual lending / funding modes, from public institutions and government bodies that provide such funding.

H.E. the Governor mentioned that during the meeting with the board chairmen of local banks he stresses the fact that confronting the impact of the international financial crisis and reducing its repercussions on the national economy requires that banks appreciate the importance of cooperation, collaboration, joint responsibility, and professionalism in crisis management in order to emerge from this crisis, God willing, stronger than before.