Press Releases

23.06.21Press Statement

“Diraya” Campaign Addresses the Practice of Loan Encashment and its Inherent Risks

In an effort to enhance financial awareness across all segments of society and encourage the Kuwaiti banking sector’s social responsibility activities, the Central Bank of Kuwait is presenting new informative content addressing the practice of loan encashment and its serious inherent risks. This comes as part of the CBK-supervised “Diraya” campaign (Be Aware in Arabic) which is managed by Kuwait Banking Association (KBA) with the participation of all Kuwaiti banks.

The CBK stressed the risks involved in this practice, where customers seek financing from an intermediary to pay back original debt at an exorbitant interest rate to be able to secure new loans above the maximum permitted in view of their actual financial situation. While getting funding to pay back the original lender to borrow anew, customers run the risk of presenting false documents or signing documents that could lead to imprisonment, the Bank cautioned.

The Bank stressed its keenness to regulate personal lending and financing activity so that customers benefit from the advantages and facilities without running the risk of default or of overburdening themselves financially.

CBK instructions in this regard sought to uphold customers’ rights while maintaining transparency. The instructions thus state that creditors extending the loan or financing should provide financial counsel to the customers and assess their current monthly obligations and liabilities. They must also clearly explain the risk involved in increasing their financial burden, most especially in the event of change in employment or retirement.

All Diraya informative media is published through multiple communication and information channels including CBK and Kuwaiti banks’ social networks accounts. More information on the campaign and its goals, and more literature on this topic is also accessible through the official campaign website:

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